Vodafone Idea received a significant relief today as the Supreme Court allowed the Centre to reconsider the telecom company's plea on adjusted gross revenue (AGR) dues, driving its shares sharply higher.
The AGR case revolves around the methodology used to calculate licence fees and spectrum charges for telecom operators like Vodafone Idea. In previous years, the government included both telecom and non-telecom revenues while calculating AGR, resulting in hefty dues for operators. This approach had a heavy financial impact on Vodafone Idea, leading to mounting liabilities and regulatory disputes.
The Supreme Court emphasized that the matter falls under government policy domain, stating there is 'no reason why the Centre should be prevented from reconsidering the issue.' The court highlighted several factors—most notably, the government’s nearly 50% equity stake in Vodafone Idea and the company’s 20 crore subscribers. Given these circumstances, the court said the Centre can review Vodafone Idea’s demand for reassessment and reconciliation of its AGR dues, possibly opening the door for relief or renegotiation.
After news of the order broke, Vodafone Idea shares surged as much as 7-11% in intra-day trade, reflecting renewed investor confidence. If the government now chooses to review the calculation of AGR dues or grants other relief, Vodafone Idea may get much-needed financial breathing space, which could improve its stability and prospects for long-term revival.
With the matter handed back to the Centre, stakeholders—including investors, employees, and over 20 crore customers—await the government’s decision on potential relief for Vodafone Idea. Any reassessment of dues or further concessions could reshape the telecom sector’s financial landscape and affect competition in India’s mobile market.
source moneycontrol
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