The government is working on a mechanism to extend relief to cash-strapped telecom operator Vodafone Idea (Vi), which has sought a waiver of Rs 45,000 crore from its adjusted gross revenue (AGR) dues, Minister of State for Communications Pemmasani Chandrasekhar said in an interview with The New Indian Express. Chandrasekhar stated that the government remains committed to maintaining a healthy telecom ecosystem and is holding discussions at the highest levels, including with the Prime Minister and the Cabinet, to find a viable solution.
Also Read: Banks Hesitant to Extend Fresh Loans to Vodafone Idea After AGR Verdict
Government in Talks to Support Vi
According to the report, the minister said it is the government's duty to protect the ecosystem and that they want companies to flourish, not to die.
"So, this is something the Honorable Prime Minister, Cabinet, and entire ministry have been discussing and will continue to discuss. And obviously, we want the companies to flourish; we don't want them to die. We want to have effective competition, but at the same time, we have to make sure we don't give away everything that they ask… Obviously, after the discussion, we will work on some mechanisms to help (Vodafone Idea)," the minister was quoted as saying.
Also Read: Communications Minister Rules Out AGR Relief, Says Vodafone Idea Must Stand on Its Own
Vodafone Idea, India's third-largest telecom service provider, has AGR dues amounting to Rs 83,400 crore. It has approached the Department of Telecommunications (DoT) seeking a waiver of over Rs 45,000 crore, which includes interest, penalties, and interest on penalties. The telco warned that it may not be able to continue operations beyond FY26 without government intervention, and failure to secure relief could force it into insolvency under the National Company Law Tribunal (NCLT).
Also Read: Vodafone Idea Says It Can’t Operate Beyond FY 2025–26 as Banks Refuse Loans
Supreme Court Dismisses AGR Petition
The company, along with Bharti Airtel and Tata Teleservices, had filed a petition in the Supreme Court seeking relief on the interest and penalty components of AGR dues. However, the apex court dismissed the plea on May 19. As per the petition, Vodafone Idea’s AGR liability as of March 31, 2025, stood at Rs 83,400 crore, with annual installments of around Rs 18,000 crore beginning March 31, 2026 — an amount significantly higher than its annual operational cash generation of Rs 8,400–9,200 crore over the past three years.
Despite the court setback, Vodafone Idea remains hopeful of government support. During a post-Q4 earnings call, CEO Akshaya Moondra said, "Our view is that the government can provide relief," stressing that the Centre should not feel constrained in doing so.
Also Read: Ericsson India Sells Rs 428 Crore Stake in Vodafone Idea via Bulk Deal
Previous Government Support
This would not be the first instance of government support. In March 2025, the government converted Rs 36,950 crore of Vi's spectrum dues into equity, increasing its stake to nearly 49 percent. A year earlier, in February 2023, Rs 16,133 crore worth of interest dues had also been converted into equity.
If no further relief is granted, the telco will be liable to pay over Rs 18,000 crore annually starting FY26 — including Rs 16,428 crore towards AGR dues and Rs 2,539 crore in deferred spectrum payments. Meanwhile, Vodafone Idea's net loss widened to Rs 7,166 crore in Q4 FY25, compared to Rs 6,609 crore in the previous quarter and Rs 7,675 crore in the year-ago period.
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