Simran Keswani – [2026] 182 taxmann.com 810 (Article)
With the advancement in technology especially after the introduction of AI smartphones are inevitable part of our daily life’s. The Indian telecom sector thus plays an important role in category to the ever-evolving technological needs. Furthermore, the imminent rollout of 5G networks promises even faster connectivity, but it also introduces complex infrastructure demands and hefty capital investments. The telecom industry has been grappling with the cash flow issues due to variety of reasons ranging from high operational cost, high spectrum cost, intense competition due to tariff wars. As of late January 2026, the total Adjusted Gross Revenue (AGR) demands for the Indian telecom sector are estimated at approximately Rs. 1.66 trillion (Rs. 1.66 lakh crore). Adjusted Gross Revenue (AGR) refers to the revenue metric used by the Department of Telecommunications (DoT) to calculate the license fees and spectrum usage charges (SUC) that telecom companies (telcos) must pay to the government. Telecom Companies have to pay Adjusted Gross Revenue (AGR) dues which are fees telecom operators in India pay to the Department of Telecommunications (DoT), consisting of license fees i.e. right to obtain telecommunication license (approx. (7-8%) and spectrum usage charges i.e. right to use spectrum (approx. 3-5%).
A 2019 Supreme Court ruling widened the definition of AGR to include non-telecom revenue (e.g., rent, interest, asset sales), resulting in massive, legally binding liabilities for companies like Vodafone Idea. Major telecommunication providers, particularly Vodafone Idea, faced substantial financial distress due to these recalculated, retrospective payments. In late 2025, the Supreme Court permitted a review and recalculation of certain dues to provide relief to struggling operators. Following severe financial stress, the government has provided a 5-year moratorium of the dues followed by a staggered repayment structure for these dues, with the bulk of payments deferred over a 10-year period. The frozen dues are subject to reassessment which may further reduce this amount. Following Vodafone’s case, Airtel is seeking similar relief
Telecommunications finance ensures that telecom companies have the funds they need to build, maintain, and expand their services while making wise financial decisions to ensure long-term success. This involves everything from budgeting for daily operations to securing investments for future growth. Taxation is one of the critical part impacting the cash flow challenges of the telecom sector.
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