Should Govt Help Vodafone Idea Further

Vodafone Idea Limited (VIL), the third-largest telecom operator in India, is in desperate need of government help to sustain its operations. The company will soon have to pay AGR (adjusted gross revenue) dues to the government. The deferred dues will be payable by the end of FY26. Vodafone Idea had decided earlier that it would raise money from the market via both equity and debt and put it into capex (capital expenditure). The revenues that it would generate from the operations/business will go towards clearing off dues and expenses.

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The fundraising has stopped, not because there’s no more need of funds, but because the company’s isn’t able to raise it. The government of India has to ensure that there’s a fair market for the competition and the consumers. If Vi doesn’t get the help it needs, the market will turn into a duopoly between Reliance Jio and Bharti Airtel. Jio and Airtel already control 80% of the broadband market.

The government needs to take a call on whether the dues should be deffered further to help the sector. It is not just about Vodafone Idea (Vi), it is about the entire sector and the consumers. In a duopoly, the market would likely not get fair prices from Reliance Jio and Bharti Airtel. Further, the telcos may also get too relaxed in bringing innovations as there would be no competition effectively to beat.