The AGR verdict could lead to a Reliance Jio and Airtel duopoly in the Indian telecom sector

Business Insider India
  • The Supreme Court delivered the adjusted gross revenue (AGR) verdict on September 1, directing telecom companies to cough up over ₹1.56 lakh crore dues over the next 10 years.
  • Leading telco Vodafone Idea is the most impacted, accounting for over 37% of the total dues.
  • A new research report indicates that this verdict could have a drastic effect on the Indian telecom sector, leading to a duopoly, tariff hikes and possibly cause the shutdown of Vodafone Idea.
  • Checkout the AGR case timeline of 26 years.
The Supreme Court delivered the adjusted gross revenue (AGR) verdict after months of hearings since its October 2019 ruling, directing Airtel, Vodafone Idea and other telecom operators to pay their respective dues over a 10-year period.

This could lead to a Reliance Jio and Airtel duopoly in the Indian telecom sector, according to a Jefferies Equity Research report dated September 1. “Vodafone Idea may need additional support from the government in the form of a further 2-year moratorium on deferred spectrum liabilities to remain solvent beyond FY23,” the report stated.

“With the verdict removing a key uncertainty around the Airtel stock, the mobile market moving steadily towards a duopoly and another round of tariff hikes should benefit the stock,” the report further added, indicating that the verdict could benefit Airtel.


The market responded sharply to the AGR verdict. The Vodafone Idea share price plunged by nearly 25% before closing 13% down at the end of the day. Airtel’s shares, on the other hand, touched a high of 8% before closing at over 6% above the closing price of August 31, Monday.

BSE / Business Insider India / Flourish

Vodafone Idea is the most impacted by the AGR verdict

Vodafone Idea is the most impacted by this verdict, while Airtel takes up the second spot. Together, they account for nearly 65% of the total AGR dues, according to the verdict delivered by the Supreme Court.

CompanyTotal AGR demandAGR dues paidBalance AGR dues
Vodafone Idea₹58,254 crore₹7,854 crore₹50,339 crore
Airtel₹43,980 crore₹18,004 crore₹25,976 crore
Tata Telecom₹16,798 crore₹4,179 crore₹12,601 crore
RCom₹25,000 croreNot availableNot available
Aircel₹12,389 croreNot availableNot available

Source: AGR case in the Supreme Court

Vodafone Idea and Airtel will have to pay 10% of their balance AGR dues by March 31, 2021.

CompanyARPU increase needed
Vodafone Idea27%

Source: Jefferies Equity Research

The Jefferies report further states that Vodafone Idea will likely have to shell out ₹6,800 crore per year after that, which is more than its current operating profit of ₹6,100 crore. Essentially, Vodafone’s revenues are simply not enough to even service these annual AGR instalments.

Airtel, on the other hand, will have to pay ₹3,500 crore per year after its first payment. This amounts to just 22% of its operating profits, suggesting that Airtel is in a strong position already.

Tariff hikes imminent

The report also adds that telecom companies will very likely announce tariff hikes to help service these AGR payments. “In our view, another round of minimum 10% tariff hike is likely in the near term,” the report said.

This should not come as a surprise. Airtel founder Sunil Mittal recently confirmed this, saying that subscribers should “prepare to pay a lot more”.

On the other hand, Vodafone Idea may have to hike tariffs by as much as 39% to survive, according to a Motilal Oswal report.


Airtel and Vodafone Idea get 10 years to repay AGR dues – here’s a timeline of the case

Supreme Court directs Airtel, Vodafone Idea and others to pay AGR dues over 10 years

A new research report says Vodafone Idea has to increase tariff by 39% to survive – and that will be a bounty for Reliance Jio and Airtel