“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,” Moondra wrote to the DoT secretary, according to a PTI report.
The Supreme Court has agreed to hear a fresh plea from Vodafone Idea on May 19, seeking a waiver of approximately Rs 30,000 crore in AGR dues. Senior advocate Mukul Rohatgi, representing the company, urged the bench –comprising Chief Justice B R Gavai and Justice Augustine George Masih–to grant an urgent hearing, highlighting the critical nature of the matter.
In its letter, Vodafone Idea reportedly warned the DoT that without debt disbursement from banks, its planned investments would not materialise.
“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 fundraising 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, as per the report.
Government’s Stake Also at Risk
In the communication to DoT, the company said failure to secure debt disbursement would stall operational improvements and halt capital expenditure. The letter emphasised that this could undermine the funds raised over the past year, render the government’s 49 percent equity stake worthless, and lead to significant value erosion across all stakeholders.
According to Vodafone Idea, if the government does not extend support and the company is unable to pay its AGR dues, it will be compelled to initiate proceedings under the National Company Law Tribunal (NCLT)—a lengthy process. In such a scenario, the network and spectrum assets would lose value, and even a short service disruption would be detrimental, the telco said, according to the report.
Service to Subscribers at Risk
VIL noted that approximately 200 million users would be affected and forced to port out in such a scenario. It asserted that timely government support would primarily benefit the general public and the Indian economy. The company added that continued operations would ensure uninterrupted service to about 200 million subscribers, sustained direct and indirect employment for around 30,000 people, and positive returns for over 6 million shareholders.
Also Read: Vodafone Idea Seeks AGR Relief from Supreme Court, Cites Sector-Wide Crisis
According to the report, Vodafone Idea has reportedly said that the government is the largest stakeholder in VIL (holding 49 percent) 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 reportedly 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.
“…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.
Proposed Payment Plan
While expressing appreciation for the government’s support through the 2021 reform package and the recent dues-to-equity conversion, Vodafone Idea reportedly 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, as per the report.
The telco urged the government to finalise the principal AGR demand at Rs 17,213 crore (till FY19) and to waive 100 percent of the associated interest and penalties.
Also Read: Airtel Seeks Urgent AGR Dues-to-Equity Conversion Amid Mounting Promoter Debt
“Considering the payments made in 2020 and conversion of AGR dues in 2023 – balance AGR dues as of March 25 will be Rs 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 Rs 714 crore (between FY31 to FY41),” it proposed.
Vi also requested support on spectrum payments. “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 added, as mentioned in the report.
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