India Supreme Court rules against Vodafone Idea and Bharti Airtel

Competition in the Indian market might get a lot smaller as the Indian Supreme Court rules Vodafone Idea and Bharti Airtel will both have to pay Government estimates on spectrum fees.

On Monday, the Indian Supreme Court announced a decision on the repayment of spectrum usage fees, licence fees, interest and penalties, a dispute between the telecoms operators and the Indian Government which has been running for years.

In short, Bharti Airtel and Vodafone Idea owe the Indian Government ₹25,976 crore and ₹50,399 crore respectively. The two telcos had calculated lower assessments of monies owed, but these figures were rejected by the Supreme Court, siding with the higher estimates of the Indian Government, which could have severe consequences for competition in the market.

Vodafone Group CEO Nick Read has already suggested it would be ill-judged to continue to invest in the India market should the Government not be prepared to make concessions. This could be the straw which broke the camel’s back, just as those who believe the Government favours Reliance Jio ponder reports the disruptive telco is lobbying for early access to 5G spectrum.

Some might look on at the situation and wonder what the Government strategy actually is. Competition in the market has already been decimated, and while it should not bend the rules unfairly for individual companies (though some might suggest it already has for Reliance Jio), it has seemingly not appreciated the long-term ramifications from its stubborn stance.

India is an incredibly promising market, but Vodafone cannot continue to throw money at the horizon. Sometimes you have to pass on opportunities because of the pain which will be caused in the short- and mid-term. That might be the case with Vodafone’s India ambitions, potentially exiting the market because the table stakes are becoming commercially unfeasible.

The conflict between the telecoms industry and the Indian Government has been on-going for years and concerns the slice of profits which authorities are entitled to. As part of the spectrum licence, the telecoms operators have to pay a portion of profits to the Government. The telecoms operators believe this should be revenues directly attributed to the spectrum in question, while the Indian Government wants a slice of the wider profits.

Thanks to the length of this dispute, the telecoms operators have been missing payments, therefore accruing penalty fees and interest payments. This is why the monies owed to the Indian Government is in the billions.

Vodafone Idea and Bharti Airtel, who have been in operation longer than Reliance Jio therefore have greater exposure, asked the Government for a more favourable repayment scheme, as well as reduction in penalties and interest. The Government didn’t agree, therefore the Supreme Court was called upon to make a decision. And this decision falls in the favour of the Government, placing financial pressure on Vodafone Idea and Bharti Airtel.

In most cases, one would suggest a corporation should pay what is owed, however you have to place this saga into context.

Reliance Jio caused a major disruption when entering the market, forcing the traditional players to reimagine business models and evolve rapidly. This has resulted in operations becoming far less profitable and competition contracting rapidly. The table below demonstrates how rapidly the market has shifted.

India mobile subscribers (thousands) – Omdia Knowledge Centre
Operator 2012 2016 2020
Reliance Jio 72,000 394,128
Bharti Airtel 181,929 265,852 289,639
Vodafone 147,476 204,687
Idea Cellular 113,946 190,517
Vodafone Idea 242,816
Reliance Comms 117,194 86,544
Tata Teleservices 62,696 52,977
BSNL 98,090 96,787 119,528
MTNL 5,386 3,640 3,305
Telenor India 54,477
Aircel 63,347 90,875
Quadrant 1,320 3,000
Shyam 14,802 5,877

In the four years since Reliance Jio has entered the market, Telenor India, Reliance Communications and Tata Teleservices all exited the mobile segment, Vodafone and Idea Cellular merged, while both BSNL and MTNL only started 4G deployments in 2020.

In 2016, India had eleven different telecoms operators serving the world’s second largest country by population, this has effectively shrunk to three today. Some of these companies would have disappeared without the dramatic change in the Indian telecoms space, though it is now in an uncomfortable position which can get worse.

Vodafone will have to question whether it is commercially feasible and responsible to continue to fight against the disruptive Reliance Jio, a rival which seems have the favour of the Indian Government.

Aside from numerous rulings allowing Reliance Jio to continue to offer loss-leader services during 2017 and 2018, a suspect decision at the time, it appears Reliance Jio is lobbying the Government to have early access to 5G spectrum. Should this report turn out to be true, and the Government decides it is a good idea, it would afford another advantage to Reliance Jio at a time where its rivals are not able to respond.

This is a situation the Government should have never allowed to evolve. Competition is being distorted thanks to incremental, favourable rulings which are all coming to a head today. India could well become a duopoly in the very near future, which is not a scenario any Government would want to see.


  1. Avatar Martin 21/07/2020 @ 8:28 pm

    Vodafone has tried everything….but the Indian Government has disrespected all efforts to reach a compromise. The government clearly favors Jio and is just NOT PLAYING FAIR. VOD should leave India and focus on all the other regions and positive opportunities outside of India ! Nick Reed is RIGHT – not to throw more good money after bad !

    • Avatar Mudit 22/07/2020 @ 3:37 pm

      I believe that Vodafone will remain invested. Now after 3 years of cut throat competition, there is a semblance of sanity in the market, the subscriber base has stabilised and the revenue per user is on upward trend. There are possibilities of equity infusion as jio has shown and with China being increasingly off radar, Vodafone and airtel bring options for investors with money to invest provided the AGR issue is settled. Fed is giving free money, it will come to growth market, like it has come in Reliance, let the regulatory issues get resolved.

      • Avatar Chetan 26/07/2020 @ 6:42 am

        @Mudit, i don’t think so vodafone or mr. Birla will remain invested. Have you seen the number of customers they are loosing every qtr?? It’s 10 to 12 mn /qtr. With this rate ot customer exhodus their network will be empty by next year. Not a single qtr post merger they have added any customers. Report has been negative every single qtr right from day of its merger announcement and even before when not merged. Not a single qtr they had shown profits. Losses also into 1000s of crore. First company to report annual loss of 75000 crore in life time. When promoters are saying we are doomed then how come any exter investor will come in. Plus promoters are actually scared of regulatory and jio clout over govt.
        So I it is matter of few days before they file for insolvency

      • Avatar Mahesh 26/07/2020 @ 9:33 pm

        When are you leaving our country and going to those other should do it asap because pseudo seculars and urban naxals will receive more jolts.

    • Avatar IndianGuy 22/07/2020 @ 5:16 pm

      The verdict is given by Indian Court of justice not by the Govt of India. I think your hatred for govt or illogical thinking is stupid and invalid.

      • Avatar justice chowdhary 23/07/2020 @ 12:25 pm

        and are you not fool enough to think that SC is not under control of present dispensen ? with judges openly flattering maganolomanic? i think its same guy.

        • Avatar Bhalchandra 27/07/2020 @ 4:25 am

          Right said friend….

      • Avatar Varinder singh 23/07/2020 @ 4:14 pm

        There r countless areas to hate the current incompetent government n the list is long n frustration of people are justified. Don’t we knw tht thy have destroyed the constitution n evry institution to benefit themselves.

      • Avatar Varinder singh 23/07/2020 @ 8:07 pm

        There countless areas to hate the current incompetent government n the list is long n frustration of people are justified.

    • Avatar Surya 22/07/2020 @ 6:02 pm

      Hi, how indian govt supportive for jio? By looking vodafone idea are in stress and jio making profit? Iam a proud vodafone Customer , Though iam not jio user .

      Jio has its own plan of launch after 2016, werin it had spectrum since decade now.

      They have planned it well and vodafone has increased it debt and not paid govt fees. Keeping default to govt and blaming govt is not a best idea. Find out ways ahead to survive in indian economy.

    • Avatar Parth 23/07/2020 @ 1:28 pm

      Whether Vodafone remains in India or not is not the look out of the Indian government. It’s upto them if they wish to do business in India. If they agree to do business in India, they have to follow the law of the land. The highest court of the country, the Supreme Court has clearly ordered Vodafone Idea to pay AGR dues, which is the case for all operators. If Nick Reed thinks that he can get away by not obeying the Supreme Court, then Iam sorry, that’s not going to happen. India is no longer a country as the British used to think. Invest nothing and just reap profits. I don’t understand why you say that the Indian government is favouring Jio. If Airtel and Vodafone are not able to retain or gain subscribers then what can Jio do. Customers have lost faith in Vodafone Idea and Airtel. Instead they find the services and prices of Jio better and more competitive. I think it’s fair that all providers have the same playing ground.

      • Avatar Braja 23/07/2020 @ 9:26 pm

        In my opinion Govt is openly favoring jio irrespective of all legal laws. Vodafone is a customer friendly and have a very diginitised business solution.
        But Jio has a monopoly like sim should be in 1st slot and many more. But this type of monopoly was not with any Operator. For any hidden reason govt is favoring Jio. Near about 2 lakh people are working in vodafone. Their feedback about company is good as compared to Jio.

    • Avatar ARJUN 26/07/2020 @ 8:18 am

      I dont agree that the Government is in favour of JIO. Why because VODAFONE, AIRTEL AND OTHER TELCOS, Eventually they all had time 12 years to pay the liability which is on there head today. win or loose it depends later but way back in 2006 (please correct me if I am wrong here) when they applied in the Honourable Court of Law for the relief in AGR matter, they all knew that winning is 50-50 so they should have been paying to the Government just incase if they would have lost the battle, but here if was the other way round they waited for the judgment to come which was not in there favour. So by that time JIO came in the market and everyone started blaming the Government to Favour why sorry JIO is a co. which started everything from scratch, like we do our business if we get something new in the market through correct channels then if we success will it be a favour from the government no well if that’s a no then we should not blame our Government for JIO. and it was the other telcos fault who did not pay right from the beginning and waited for so much of time.

    • Avatar Sai 26/07/2020 @ 9:08 am

      We don’t want Vodafone in India
      Worst service but charging huge money from customers
      We support indian companies

      • Avatar Nag Sripathi 04/08/2020 @ 5:34 pm

        Till entry of Jio this vodafone, Idea and Airtel has cheated customers by charging more for 1gb data by providing 3g service. After jio True/full 4g network entry they started investing more on 4g that makes/shows loss to the company. Simply, they are reinvesting the money/profit which they earned through 3g by cheating customers. moreover, 4g spectrum allocation was allotted in the year 2011, where these super network providers has started 4g after entry of JIO. if jio has not entered Indian market , definitely these carrier providers would not have started 4g and will be going on cheating us with 3g.

  2. Avatar Prasad 22/07/2020 @ 4:36 am

    Jio has requested for 5g spectrum for the manufacturing of 5 g solution and its export to other countries, and not as a telecom operator.
    Airtel and any other Indian company can also seek and get,.
    If others can not do , its not the fault of jio.

  3. Avatar Mudit 22/07/2020 @ 3:31 pm

    While the situation has turned desperate for the Vodafone now, one can not blame the govt entirely. Prior to the entry of reliance, these companies were earning a fair return and all these years when the case was dragging in the court, they never thought to atleast make provisions in case the judgement is unfavorable. The revenue sharing model be in telecom or in oil and gas is always in favor of the licensee, and the government is right in insisting on a broad definition of revenue to ensure that its share is protected and is not lost in accounting transfers and entries. Vodafone was taking the risk of adverse judgement by not making timely provisions when the market was giving a good return. If at all Vodafone is the victim of unfortunate timing, as now it is very difficult to pay for the sins of the last many years.

  4. Avatar Ghost Rider 22/07/2020 @ 4:20 pm

    indian government is ass kissing ambani ambani modi both gujju are robbing the country of good companies and competition after collapse of voda and airtel jio will start extorting customers which he said airtel and voda was doing during launch of jio but now jio is doing and ambani said data is new oil but now data will be more expensive than oil at 350 rupees per gb per month or even higher ambani you gujju robbing scum

  5. Avatar Professor Peter Curwen 22/07/2020 @ 4:29 pm

    There are problems counting subscriber numbers and the operators cite less than the TRAI. Nevertheless, Vodafone Idea has 250+ million subs which is among the world top 10 so one may well ask how it can be on the verge of going out of business. The easy answer is simply that it is India where regulators love to quarrel with each other over years if not decades without much interest in the financial consequences of their rulings, and the Supreme Court is clearly determined to get its own way come what may. Vodafone has long been – since the Mannesmann takeover – one of the world’s greatest value destroyers – see its present share price – but this time it is not guilty. However, large profits are not available in its other markets and certainly not on a scale to subsidize Vodafone Idea, so exiting the market may ultimately be the only answer. For India to be left with 2 private operators is frankly a bad joke, but there you go.

  6. Avatar shripadadedhpande 22/07/2020 @ 5:27 pm

    These telcos have collected ~ 14 Lacs crores from consumers. Why they should be exempted to pay taxes ? Our FM says both “Government doesn’t have money” also “Government is in no hurry to collect taxes. God bless our country and save us from such entities.

    • Avatar RANGANATH M R 25/07/2020 @ 3:18 pm

      These people who blame govt n court are investers in vod n airtel. So they r in pain. Natural

    • Avatar Dinesh 26/07/2020 @ 12:35 pm

      I have a question regarding speed and service and network coverage, I think airtel, idea n bsnl these three are best about network coverage like its network cover most village, I m not talking about city. And our most population reside on village n in city all network is use by subscribers. In respect of above jio is nothing jio has zero coverage then how can getting subscribers more than airtel n voda. Its only news basis, I think trai should recount don’t spread panic
      And all respected person which is involved in this situation, if idea will shut than how can connect to all India! Kya airtel will give all services to all voda idea subscribers, here I not take name of jio n bsnl because all person know all situations.

  7. Avatar ghost 22/07/2020 @ 5:52 pm

    Written by Jio Davis Hahaha

  8. Avatar Animesh Das 22/07/2020 @ 6:18 pm

    This Government is greedy and corrupt too. They desire to have slice out of every single cake. If so, there must be Cake Sharing Clauses with the Agreement. Nothing has been heard on this account over a prolonged period of arguments. If not, let Airtel and VIL pull down their shutters. The impact would be catastrophic for the Government so far FDI and businesses in India is related.

  9. Avatar Telecomguy121 23/07/2020 @ 2:13 am

    To take things into prespective in the telecom in india..The setting up cost of 2G spectrum is more than the later version of 3G & 4G.The hardware cost and the running cost of maintaining 2G is high and in india most people can just afford a 2G handset only…which leaves more than 60% of the population without access of telecom communication.. A look at the subscriber base of each existing operator gives a fair idea of how backward we are.. and cutting out competition by biased and impartial decision by the government favouring a particular player will make the market unstable and than the customers will bleed by the monopolistic behaviour of the single or double player who will be left in the market.. its never a welcoming decision becoz if a company moves out of india it will always create a negative image on FDI in the near future… very few company will want to invest owing to high handed profit margin being expected from the operators…The number of unemployed people linked with the company directly or indirectly is more than 1 lakhs will lose their a time when the government cannot create job….it will be a dark day in the histroy of indian telecom industry if a company is made to surrender and made to leave india because of some illogical and irrelevant calculations which i believe should not have been enforced upon logically

  10. Avatar Vineet 23/07/2020 @ 6:24 am

    Jio active subscriber base is lower than what it states. I One of my Jio sim has not been deactivated by the company since 3 years without any recharge.

  11. Avatar Sunesh 23/07/2020 @ 1:52 pm

    There is no such ruling by Supreme court of India. Don’t spread false news

  12. Avatar Arun kher 23/07/2020 @ 2:02 pm

    Has someone thought that if Voda shuts shop, it will take 600 days to do porting since capacity in india is only 5L per day. Many people get OTP to do transactions so there will b chaos. Court has to take cognizance of that and understand the real issue. Also if Voda goes bankrupt, how is DoT getting 50000 cr? Typical bureaucracy without application of mind

    • Avatar Ajay 09/08/2020 @ 6:32 pm

      Agree , if Vodadone has indeed made money in lakhs crores so far , where has it gone . It’s balance sheet and share value has eroded as entire money is reinvested
      If Supreme Court plays hard, they won’t recover anything as Voda will shut and thousands will be jobless

  13. Avatar Anant 24/07/2020 @ 5:55 am

    Vodafone has enough of no network connectivity.only call drop at rise.
    Why should they continue.
    Common man what he requires.
    Data and calls.
    When you call call drops.
    When you want to use cannot do.
    Only you have to pay the bill.
    Why on this earth would they should allowed to be continue.
    Speak to call centre no best answers.
    Email them auto generated reply.
    You talk to them on app no proper reply.
    Visit stores same there too
    Only indians are only for payment of bill before due date to aviod penalty charges.
    So from 11 aug it will be independent if this coming close down.
    Write now before typing this i wanted to call bit call is dropping. You have to use through wifi.
    So best for consumers and nick read close vodafone for ever

  14. Avatar Anirban Bhowmik 24/07/2020 @ 6:56 am

    Thanks to Jio, the rules of telecom market have changed and customer is the real winner. Others should learn to compete and not sit on past laurels.

  15. Avatar Cmatic 24/07/2020 @ 11:30 am

    Just hope everyone realises that these are monies that have been collected from consumers..and NOT remitted to the government. That is criminal malafide intent right there. They gambled on a legal approach.. And lost! Now shut up and put up.. Or get out! Its simple! And this thing has been in play since much before Jio came into being. So those who are thinking there are ulterior motives really need to switch the brand they are smoking/drinking!

  16. Avatar Pandit 24/07/2020 @ 1:30 pm

    Not many remember, how jio came in the market Ambani Modi duo together bunched the idea of lifetime free connection with certain fees creating access within certain time frames, now users forget how they’re bunked & dumped if not fu***d.
    Before jio situation was bad probably in the name of cheapest in the world they were robbing poorest in the world, duo led by Modi Ambani offered cake ? to poorest in the world while they don’t have basic bread to eat. But as usual duo fooled the Indian’s well beyond imagination. Now duo sucking the blood of same people offered cakes, ARPU of these telecoms were lowest in the world but still making or minting money, now almost doubled but still they’re saying we are doing charity to poor Indian’s led by Ambani & backed & thumped by Modi. Ambani one of the biggest thief in India, they’ve robbed India always from thread/cloth trader if not real dalal on the street, they manipulated govt policies at any level by every means of corruption now situation is too normal whatever Ambani does it’s normal, even if Modi is in Ambani pocket.
    Now there are good chance Vodafone will disappear if not able to manage grim situation of death bed, it looks they need to survive corona without medicine.
    Instead of promoting BSNL/MTNL earlier govt’s & now Modi’s special attention is creating jio as lifeline to Indian’s, of course Ambani’s meddling power is working in full stream.
    Why not govt is working on a formula to give 5G to BSNL/MTNL & looking for investment from same dumping on Ambani’s but it looks corruption has new definition Modi hindutva nationalist…

  17. Avatar Dinesh DEOLI 25/07/2020 @ 3:57 am

    If telecom market remain in balance position consider comman people benefits then govt. & Supreme court should give right decision under pandemic circumstances must give some favourable decision also in favour of voda India & Airtel otherwise look interest in monopoly

  18. Avatar Agrawal 25/07/2020 @ 4:51 am

    Blindly, Government is favouring RIL. PMO is not even responding to complaints against RIL. There is almost no Opposition left.

  19. Avatar Iqbal ahmed 25/07/2020 @ 5:39 pm

    It is out in the open that justice arun mishra is in favour of jio and modi… He is certainly behaving at someone behest… Stubborn and uncompromising… When the Govt of the day has no problem with 20 years of staggered payment then Y is Supreme court behaving otherwise showing that they want to inflict maximum loss to voda and bharti in fact they want voda out….. Which is not good for the Indian economy as on one hand Mr. Modi is calling for foreign inveatments and on the other hand Supreme court is hell bent on reducing thousands of crores invested in India to Zero….

  20. Avatar Indian 26/07/2020 @ 9:25 am

    whether government is favouring jio or not that doesn’t matter as a consumer point of view what we know is that before jio we get only 1 or 1.5 GB data to use it for the whole month and after jio entry we get 1.5 GB data daily before jio our outgoing call is charged for every second or minutes and now its free so whatever jio is doing as a customer we are happy by the change and i like to see jio making improvements in this as well if they get the 5G for us jio is always good for India and its citizens no matter how much few anti-nationals people hate Modi government or jio the Indian citizen will show their support to the government and jio.

  21. Avatar P.K.CHHATWANI 26/07/2020 @ 9:31 am

    Government is not interested to bring BSNL & MTNL in correct place. They are keen to bring private operators like JIO who is bringing all the imported network policy and planning from china even still today even their equipment and mobile handset is of China make. While in case of BSNL it now banned. Even Air tel is using modem of Huweai make ‘china model. Government is keeping mum. These private operators don’t know how china is playing a role of spy through their network. Even BSNL & NTNL has not been given 4G & 5G spectrum for mobile networks but it has been given to private operators and these operators have taken debt from banks in a huge amount which they are unable to pay and say themselves as Bankcrupt. Even though these operators are the first choice of Government and let the BSNL & MTNL collapse because of their wrong policies will do . OUR NATION IS FIRST THEN ANYTHING ELSE. Government should seriously look into the matter. Goverment Propaganda is Make in India but businessman like ambani purchasing equipment from china in the the eye of Government can not go together. Public understand everything. BJP and Congress is a two phase of one coin. All have weaknesses . They should give importance to nation and play a role of make in India in a true sense.

  22. Avatar Sagar 26/07/2020 @ 2:07 pm

    It’s a crocodile tears, Airtel and voda/idea looted customers in 2g era, it was telecom cartel which had blessings of UPA. For 2g 1gb data they used to charge 250 rs, I had to pay 3000 month to airtel just because I traveled to banglore and these shady customer care did not processed my new roaming plan. It’s a karma

  23. Avatar Yeshwanth Pai 26/07/2020 @ 2:08 pm

    When the courts give a ruling in a dispute against companies running into billions of dollars in the USA, all companies pay up without much of a whimper ( eg. VW & Mercedes-Benz cases of pollution manipulation methods in their cars). Then why should these telecom companies with over 250.million consumer base make a mockery of the Indian judicial system and pretend to play the holier than saints. They are bound to make money today or tomorrow. The answer is simple. They are only hoping a corrupt power will take charge by ousting Modi in next election and then we will walk away not paying by bribing the congress or others as they have been doing all these decades. Otherwise there is absolutely no logic in them dithering to pay now, because Modi’s government does not accept any flash money from under the table. Simple as this.

  24. Avatar Rajendraprasad Shinde 26/07/2020 @ 6:35 pm

    I’m old bsnl, then Reliance CDMA, then Idea (now Voda) and also a Jio user. If you look at the customer care aspect Reliance CDMA was the best, bsnl was available (and is still) in its nation wide exchanges to approach for a bereaved customer. To some extent Idea was approachable but Jio is never approachable. All those who have favoured Government will have to simply ask for hdmi connection cable of Jio Phone which they offer in ad but have never given it to anyone. They flagrantly trample customer right. They never respond on Twitter. Bsnl and Idea do. That’s my objective experience. Without that cable, main advantage of Jio Phone over all other operators is just a mirage because with that cable you will be able to cast programmes from handset on smart TV. I have attempted all ways to approach then but of no avail. Unfortunately the blind bhaktas of current Gov don’t think in terms of plain consumer right violation in specific case and just favour government. I wish Voda stays and bsnl also remains public company so that Jio will have some peer pressure to value customers. A day is not far when monopoly of Jio will enable only super rich to get all Telecom services and the current middle class (who favours government now) will be frustrated but the time cycle cannot be turned back then.

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