The Indian government is reportedly considering another wave of relief measures for the struggling telecom sector, which could offer significant financial relief to companies such as Vodafone Idea (Vi), Bharti Airtel, and Tata Teleservices. After easing the financial burden by waiving the requirement for telecom operators to provide bank guarantees for past spectrum dues in December 2024, the government is now evaluating a proposal to waive a substantial portion of the dues linked to the Adjusted Gross Revenue (AGR) following a 2019 Supreme Court ruling, both ET and Moneycontrol reported, citing multiple sources.
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Proposed Waivers on AGR Dues and Penalties
According to the reports, this new relief plan includes proposals to waive 50 percent of interest on AGR dues, along with 100 percent of penalties and interest on penalties. If finalised, this could result in over Rs 1 lakh crore in financial relief for the telecom sector, with Vodafone Idea benefiting the most due to its severe financial distress. Specifically, Vi's AGR dues could be reduced by over Rs 52,000 crore, Bharti Airtel's by Rs 38,000 crore, and Tata Teleservices' by Rs 14,000 crore.
Reliance Jio has no legacy outstanding AGR dues and is unaffected by the proposed measure. Tata Tele has ceased offering retail mobility services and now solely provides enterprise mobility services.
Ongoing Discussions on AGR Relief
"There is positive momentum within the government, with discussions involving the finance ministry, the telecom department, and the cabinet secretariat. While no timeline has been set, there is agreement that relief should be extended to telcos on the AGR issue," a senior telecom executive familiar with the talks was quoted as saying.
The source reportedly revealed that the Department of Telecommunications (DoT) has conducted multiple meetings with telecom operators, including Vodafone Idea, during which the telcos highlighted their financial strain.
"The government is working to announce the measure—the second such substantial relief package for the debt-laden sector since September 2021—in the February 1 budget," said the sources, according to an ET report.
AGR Issue and Supreme Court Ruling
The AGR issue dates back to the Supreme Court's October 2019 verdict, which upheld the government's definition of AGR and imposed Rs 1.47 lakh crore in dues on telecom operators, including hefty interest and penalty charges. This financial strain has placed immense pressure on companies like Vodafone Idea, which is facing mounting debt and the looming start of AGR repayments in FY26. Vi had already initiated discussions with the government after the rejection of its AGR re-computation petition in 2024.
Also Read: Not Received Any Communication on BG Waiver Yet, Clarifies Vodafone Idea
Bank Guarantee Waiver in December 2024
In a positive development for Vi, the December 2024 waiver of bank guarantees for past spectrum dues freed up Rs 24,800 crore, which has enabled additional credit support from lenders. This latest proposal could stabilise the telecom sector, benefiting Vi most significantly and ensuring a more level playing field across operators, the reports said.
To date, the companies have reportedly paid approximately Rs 37,000 crore in AGR dues to the government, as per the Supreme Court's directive. Bharti Airtel has contributed around Rs 19,000 crore, while Vodafone Idea has paid Rs 13,500 crore, and Tata Teleservices has settled Rs 4,197 crore. The amount paid by Vodafone Idea includes the government’s equity conversion.
