Summary: India’s Supreme Court has reserved its verdict on the timeline for the payment of Adjusted Gross Revenue (AGR) dues by telecom service providers like Bharti Airtel and Vodafone Idea. While the Indian government maintained that it stands by its proposal to give telecom companies 20 years for the payment, both Airtel and Vodafone Idea now offered to clear AGR dues in 15 years after the court made it clear that a 20-year period is too long for AGR repayment. Tata Teleservices, however, sought seven to 10 years to clear its dues. The three-judge bench led by Justice Arun Mishra has now fixed the next hearing for August 10. “Telcos are earning more than their pending dues…we won’t hear arguments for reassessment even for a second. We will impose exemplary costs on telcos. Why should we give relief to telcos behaving dishonestly on pending dues? Telcos are still challenging the AGR calculation by DoT (Department of Telecommunications),” Mishra said during the AGR hearing. Vodafone Idea and Bharti Airtel informed the court that they have paid Rs 18,004 crore ($2.42 billion) and Rs 7,854 crore ($1.05 billion), respectively, against their overall AGR-dues. Both companies will now have to pay Rs 25,976 crore ($3.49 billion) and Rs 50,399 crore ($6.76 billion), respectively. Tata Teleservices will now have to pay Rs 12,601 crore ($1.69 billion). It has already paid Rs 4,197 crore ($563.13 million). Hughes Communication, on the other hand, paid Rs 28.40 crore ($3.80 million), and is now required to pay Rs 126 crore or ($16.91 million) During the hearing, Vodafone India informed the court that equity worth Rs 1 lakh crore ($13.42 billion) has been wiped out due to various factors, including intense competition in the market. “Whatever we earned was washed away in expenses,” the telco’s representative informed the court. India’s Solicitor General Tushar Mehta told the court that the Indian government stands by its decision to offer a 20-year repayment timeline to telecom companies. “…it is a well-thought-out decision by the Cabinet aimed at preventing the economy from going haywire”. The court rejected lower assessments made by telecom companies and sternly told all telecom companies that the Indian government’s calculation of AGR dues was final. During the hearing, Airtel’s lawyer argued that the amount payable should be Rs 21,000 crore ($2.82 billion) instead of Rs 43,780 crore ($5.87 billion), as claimed by the DoT. The court told the Sunil Mittal-led telco that it will not permit the company or the government to recalculate the amount as it would be a violation its previous order. It added that the definition of AGR has already been clarified by the apex court. Market analysts said that ailing telco Vodafone Idea may face an annual outflow in the Rs 5,900-6,253 crore ($791.63-$838.99 million) range if the 15-year staggered timeline is approved by the Supreme Court. In case Vodafone Idea manages to secure a 15-year deferred (AGR) payment plan from the court, Credit Suisse said, the telco would then need meaningful equity infusion by the second half of fiscal 2023. “Lower payment tenure may put pressure on Vodafone Idea’s cash flows,” Motilal Oswal Institutional Equities said in its report.