Won't be able to operate post FY26 without government's timely support on AGR: Vodafone Idea to DoT

New Delhi: Telecom operator
Vodafone Idea
told the Telecom Department that without the government's timely support on AGR, it will not be able to operate beyond FY26 as the bank funding discussions will not move forward. The embattled telco shot off a letter to the Telecom Department on April 17, 2025, making a strong case for a lifeline, saying "no support will lead to a point of no return".
"Without GoI's (Government of India) timely support on AGR, VIL will not be able to operate beyond FY26 as the bank funding discussions will not move forward," VIL CEO Akshaya Moondra wrote in a letter to the DoT secretary.
A query sent to
Vodafone Idea
(VIL) did not elicit a response.
It is pertinent to mention that the Supreme Court on Thursday agreed to hear a fresh plea of Vodafone Idea seeking waiver of around ₹30,000 crore adjusted gross revenue (AGR) dues.
A bench comprising Chief Justice B R Gavai and Justice Augustine George Masih was urged by senior lawyer Mukul Rohatgi, appearing for the telecom firm, that the plea needed an urgent hearing.
The bench is likely to hear the plea on May 19.
Vodafone Idea, in the letter, cautioned DoT that without debt disbursement from banks, the investments it planned will not take place.
"Resultantly, operational performance improvement will be stalled. More importantly, the funds raised by the company will be utilised soon and the entire capex cycle will come to a halt. In such a case, the entire fund raising done over last 12 months and investment done so far by the company, as also the equity stake of government including the recent conversion, will lose value," VIL said.
According to Vodafone Idea, without government support and in case VIL is not able to pay the
AGR dues
, the company will have to go into a process of NCLT which would be a long-drawn process.
In such a scenario, the network as well as spectrum assets will lose value with the service being disrupted even for a short period, the telco said.
VIL said about 200 million users would be affected and will have to port out, in such a case. Timely support will primarily benefit the general public and Indian economy at large, it said.
While it will ensure continuity of services to about 200 million subscribers, it will also offer continued direct /indirect employment to about 30,000 people and positive returns to VIL's over 6 million shareholders.
Voda Idea is understood to have said that the government is the largest stakeholder in VIL (49 per cent) and in the absence of urgent intervention and support, it will itself have most to lose in case VIL is marginalised or cannot continue operations as a consequence of impact of AGR judgement.
The company argued that without Centre's support, VIL's EBITDA will decline going forward (due to loss of subscribers caused by lack of further capex investments) and the company will default on making the payment to the government for AGR instalment in March 2026 itself.
"... plus the value of GoI stake will be reduced to nil, in case no support is provided," the company said.
"The government has always maintained that it supports a 3 private player market. In case the telecom sector is reduced to a duopoly, this will not only be a bad outcome for competition and consumer choice, but will also make future spectrum auctions, a constant source of revenue for the government, a non-starter," it said.
While appreciating the support of the Government by way of 2021 reform package and recent dues-to-equity conversion, Voda Idea said the AGR judgment "has caused grave damage to the business and financial health of the company, in addition to the unfair burden caused by the AGR liability itself, which has put the company in a situation, where it cannot survive without the AGR liability issue being addressed".
"Hence, a timely resolution of AGR matter and acceptance of our request for liquidity support by spectrum moratorium and extension is critical," VIL is learnt to have said.
It requested the government to mull AGR support. "...consider principal demand as per DOT (till FY19) of ₹17,213 crore as final and provide 100 per cent waiver on interest charge and on penalty," it said.
"Considering the payments made in 2020 and conversion of AGR dues in 2023 - balance AGR dues as of Mar'25 will be ₹7,852 Crore (post above waivers)...Payment to be made over 20 years (including 4 years of moratorium, which has already passed). No further accrual of interest with 5 years of additional moratorium (till FY30) and subsequent payment in 11 equal instalments of ₹714 crore (between FY31 to FY41)," it proposed.
It had also sought support on
spectrum payment
.
"Extension of spectrum payment period by 1 year for spectrum acquired prior to 2021 auction...Moratorium on Spectrum instalments payment for five years that is between FY28 to FY32," it said.

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