Vodafone Idea expressed disappointment at what it termed a broad definition of adjusted gross revenue (AGR), which covers non-core activities, issued by India’s Supreme Court, noting it could seek a review of the decision.

The judgement affirms the Department of Telecommunications’ position and means all revenue, including non-telecoms related activities, will be considered AGR. Capital gains from the sale of assets and insurance claims, however, won’t be included.

In a stock market filing, the second-largest operator in India said: “We urgently request that the government engage on this matter in order to find ways to mitigate the financial stress for the industry.”

Vodafone Idea noted the case, which been going on for 14 years, had been through several rounds of litigation, which have been largely in favour of the operators.

It added the judgement clearly has significantly damaging implications for the country’s telecoms industry, which is already reeling under huge financial stress and is left with only four operators.

Industry impact
Since licence and spectrum usage fees are calculated as a percentage of AGR, Vodafone would be on the hook for fees totalling more than INR400 billion ($5.6 billion).

Rival Bharti Airtel said the judgement will hurt the viability of the sector, which is burdened by huge debt, The Economic Times reported. Including non-core revenue would mean it would need to pay an additional INR410 billion in fees.

Given the industry’s financial standing, Rajan Mathews, head of the Cellular Operators’ Association of India, told the newspaper the court ruling is a “disastrous blow”, adding: “The question that arises is whether this is the financial straw that finally breaks the back of operators.”