What is the AGR (Adjusted Gross Revenue) Case: Meaning, History, Implications

What Is the AGR Case?

The AGR case is an ongoing legal battle regarding the Department of Telecommunications’ definition and calculation of Adjusted Gross Revenue (AGR) for telecommunication companies. While calculating the AGR of telecoms companies, DoT included non-operating revenue such as rent, interest and asset sales, which resulted in hefty dues for operators. This particularly impacted Vodafone Idea, which owed over ₹58,000 crore.

The telecoms companies argued that AGR should only include revenue from core operations, i.e, providing telecommunication services and not other sources. In 2019, the Supreme Court supported the government's definition of AGR, resulting in huge liabilities for the industry players. In 2025, due to the government's 49% stake in the company, the Supreme Court allowed the government to reassess Vodafone Idea's dues.

How Does It Impact Vodafone?

DoT’s inclusion of non-operational revenue in Adjusted Gross Revenue (AGR) significantly impacted Vodafone Idea by creating huge and unsustainable financial liabilities. This brought the company to the brink of insolvency, which caused the government to take a 49% stake in the company.

Since the Supreme Court allowed an assessment of Vodafone’s dues, if there is scope for any reduction, Vodafone can invest in 5G expansions, network upgrades and repay its debt. After the Supreme Court’s order, investors regained confidence in the company, leading to a 10% intraday surge in its stock price.

How Does It Impact the Telecommunications Industry?

The Supreme Court ruled in favor of the DoT, which created significant liabilities for the telecom companies. The companies must comply with the orders and pay their dues. The unsustainable financial burden on weaker telecoms companies may lead to market consolidation, leaving India with two Main players, Reliance Jio and Bharti Airtel.

The judgment has negatively impacted most of the telecoms companies' ability to fund and invest in 5G expansions and infrastructural upgrades. This can seriously downgrade the type of network quality and efficiency for the general public.

How Does the AGR Case Impact Investors?

The AGR case introduced extreme volatility and high risk in the telecommunications sector in India. The immediate impact of the Supreme Court’s rulings in 2019 led to a sharp decline in the stock prices of weaker telecoms companies. Later, when the court allowed the government to reconsider Vodafone Idea’s dues, it led to significant surges in the company's stock prices.

Investors are often wary of debt-ridden companies like Vodafone Idea, as it’s a high-risk investment. The company repeatedly warned about its high debt and high probability of insolvency, which would result in total loss for investors, before the government decided to intervene. This has caused investors to be cautious regarding their investments in the telecommunications sector and to ponder the possibility of a Duopoly of Bharti Airtel and Reliance Jio.