The Supreme Court on Friday deferred the hearing of Vodafone Idea Ltd’s plea challenging an additional ₹9,450-crore adjusted gross revenue (AGR) demand from the Union government after the Centre sought more time.

Appearing for the Centre, Solicitor General Tushar Mehta told the bench that since the government now holds a significant stake in Vodafone Idea, there has to be some solution in the benefit of consumers. He urged the court to hear the matter urgently next Friday to work toward a resolution.

The dispute traces back to the Supreme Court’s 18 March 2020 order finalising Vodafone Idea’s AGR dues up to 2016-17 based on calculations by the Department of Telecommunications (DoT) and barring any self-assessment or reassessment of dues.

Despite this, DoT has now sought further payments for FY18 and FY19. Vodafone Idea, in its petition dated 8 September, argued that most of the new demand relates to periods already settled by the Supreme Court.

The government owns 50% of Vodafone Idea, having converted ₹53,083 crore of the telecom operator’s AGR dues into equity in two tranches—in February 2023 and April 2025.

Of the ₹9,450 crore additional demand, ₹2,774 crore has been sought from Idea Group and Vodafone Idea (post-merger in August 2018), while ₹6,675 crore pertains to Vodafone Group (pre-merger).

Vodafone Idea already owes around ₹83,400 crore in AGR dues, with annual payments of ₹18,000 crore starting March. Including penalties and interest, Vodafone Idea’s total liabilities to the government are estimated at around ₹2 trillion.

“A sum of approx. ₹9,450 crore has been computed by the DoT to be considered with reference to the payment due on 31 March 2026. Of this, the majority amount—approx. ₹5,606 crore as on 31 March 2025—is for the period up to FY17, which has already been crystallized by this Hon’ble Court,” Vodafone Idea said in its petition.

The telecom operator has asked the Supreme Court to quash DoT’s additional demands for FY17 and earlier, and to order a comprehensive reassessment and reconciliation of all AGR dues for that period.

It warned that the hefty liability threatened its survival and “the livelihood of thousands of employees working directly or indirectly” with the company. Vodafone Idea serves about 198 million subscribers and employs more than 18,000 people.

DoT’s disputed math

Vodafone Idea also argued that DoT’s revised calculations—relating to licence fees (a percentage of AGR) and spectrum usage charges—are erroneous. If spectrum usage charges up to FY17 are included, the additional dues amount to about ₹6,800 crore as on 31 March 2025, it said.

In a 13 August letter, DoT said updated outstanding licence fee dues up to FY19 had not been tabulated in the Supreme Court’s 1 September 2020 order. It added that the revised amounts were calculated with interest and penalties up to October 2019, and updated with interest at 8% per annum through March 2025.

Vodafone Idea, in its 28 August response, rejected the revised demand without a Supreme Court clarification, saying it admitted no liability beyond periodic interest on ₹58,254 crore and flagged errors in DoT’s calculations for FY18 and FY19.

In April, Bharti Airtel also asked DoT to convert its AGR dues of about ₹40,000 crore into equity, which could give the government a 3-4% stake.

Airtel later said it was ready to pay the dues but expected similar relief as any other telecom operator. Mint earlier reported that Airtel is unlikely to join Vodafone Idea in this latest Supreme Court move.

The AGR background

The dispute dates back to 2019, when the Supreme Court ruled that telecom operators must pay statutory dues on AGR, including non-telecom revenues. At that time, DoT pegged Vodafone Idea’s dues at ₹58,254 crore—far higher than the company’s self-assessed estimate of ₹21,500 crore.

The apex court rejected curative petitions from Vodafone Idea and other operators in August 2024, and in May this year dismissed Vodafone Idea’s plea for a waiver on ₹45,000 crore in interest and penalties on its ₹83,400 crore dues.

“It is important to note that this payment of approx. ₹18,000 crore, which has to be paid on a yearly basis for the next six years, is far in excess of the company’s operational cash generation capacity each year,” Vodafone Idea told the Supreme Court in May.

The company has warned that its annual payments of ₹18,000 crore for the next six years are far beyond its operational cash generation of ₹8,400-9,200 crore a year.

Vodafone Idea’s former chief executive Akshaya Moondra said in August that early resolution of the AGR dispute was critical for the telecom operator to be able to secure bank funding.