Government approved a major relief package for Vodafone-Idea, granting it a five-year moratorium on its outstanding payments. This provides significant relief to the debt-ridden telecom company.
PTI sources said the Union Cabinet, chaired by Prime Minister Narendra Modi, agreed to a moratorium on Vodafone Idea Limited’s (VIL) Adjusted Gross Revenue (AGR) dues of ₹87,695 crore.
These dues will now be payable by the struggling company from the financial year 2031-32 to 2040-41. AGR dues refer to the payments owed by telecom companies to the government based on Adjusted Gross Revenue (AGR). This is the revenue on which telecom operators are required to pay license fees and spectrum usage charges.
It includes all revenue, even non-telecom income (such as interest, rent, and asset sales). Sources said that in addition to these dues, the AGR dues pertaining to FY 2017-18 and FY 2018-19 will be payable by Vodafone-Idea without any changes during FY 2025-26 to FY 2030-31.
Vodafone-Idea has been grappling with a prolonged financial crisis, primarily due to intense price competition, excessive debt, and massive liabilities stemming from a change in the definition of AGR. The company has been struggling with continuous losses, declining subscribers, and limited capacity to invest in network expansion.
Meanwhile, its competitors are rapidly rolling out 4G and 5G networks. The company has been surviving on repeated government relief and conversion of dues into equity. Some had hoped that the Cabinet would waive a portion, or perhaps all, of the AGR dues.
However, the Cabinet instead decided to impose a moratorium on the dues, giving the company time to recover. Sources said that the withheld outstanding amount will be re-evaluated by a committee based on the audit report, and the outcome will be binding on both parties.
