The Department of Telecommunications’ (DoT) proposal to waive adjusted gross revenue (AGR) dues for telecom operators has been put on hold due to a lack of consensus within the government, dealing a setback to loss-making Vodafone Idea. Government officials believe it would be inappropriate to provide financial relief to private telecom firms, including profitable ones, especially since the Supreme Court had already ruled on the matter. However, DoT is expected to work on a revised relief package for the struggling telecom sector, given Vodafone Idea’s financial challenges.
With a cash position of ₹12,090 crore as of December 31, Vodafone Idea faces upcoming statutory dues of ₹29,100 crore in March 2026 and ₹43,000 crore from FY27 to FY31. The government is now considering alternatives, including taking additional equity in Vodafone Idea. The initial waiver proposal, reported on January 18, aimed to waive 50% of interest and all penalties, potentially providing relief exceeding ₹1 lakh crore—more than half of which would have benefited Vodafone Idea. Bharti Airtel, India’s second-largest telecom operator, would have gained over ₹38,000 crore, raising concerns due to its strong financial position and ability to repay. Tata Teleservices, which no longer offers retail mobility services, would have seen its dues reduced by approximately ₹14,000 crore. Reliance Jio remained unaffected as it had no legacy AGR dues.
The AGR issue dates back to October 2019, when the Supreme Court upheld the government’s definition of AGR, leading to dues of ₹1.47 lakh crore across the industry. These comprised ₹92,642 crore in license fees and ₹55,054 crore in spectrum usage charges, with nearly 75% of the total amount arising from interest, penalties, and penalty interest.
As part of a September 2021 telecom bailout plan, the government granted a four-year moratorium on AGR and spectrum dues, which will end in 2025-26. Thereafter, telecom companies must resume payments, with 10% due annually until 2031. The government has already converted ₹16,000 crore worth of Vodafone Idea’s interest payments into a 33% equity stake. Following Vodafone Idea’s ₹24,000 crore equity fundraising and capital infusion from Vodafone Group, the government’s stake now stands at 22.56%, while Vodafone Group Plc holds 24.39% and the Aditya Birla Group (ABG) just over 14%.
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If alternative measures fail, the government may consider acquiring additional equity in Vodafone Idea. The telco has expressed its intention to address potential cash shortfalls on AGR payments through another round of debt-to-equity conversion. It had also formally requested relief on the interest and penalty components of AGR dues.
