The Union government is reportedly considering new relief measures to support Vodafone Idea (Vi), in a bid to prevent the struggling telecom giant from going under. According to a report by The Economic Times, these steps could include a significant extension of the repayment period for adjusted gross revenue (AGR) dues—from the current 6 years to as long as 20 years—as well as a shift from compound interest to a simpler, more forgiving interest structure.
These discussions come at a critical time. Vodafone Idea’s stock rose over 4% on Tuesday, trading at ₹6.83 as of 11:20 AM, signaling investor optimism over potential government intervention.
The government holds a 49% stake in Vi, making it the company’s largest shareholder. There is increasing concern within official circles that without additional regulatory support, Vi could be heading toward insolvency. The proposed relief could potentially bring down the telco’s annual AGR burden from ₹18,064 crore to around ₹15,000 crore—or even less, depending on how the terms are finalized.
Still, doubts remain. Some officials are reportedly sceptical about whether Vi can meet even these reduced payments, given the company’s constrained cash flow and massive debt load.
This comes on the heels of a major legal blow: the Supreme Court recently dismissed Vi’s plea to waive approximately ₹30,000 crore in interest and penalties related to AGR dues, calling the request “shocking” and “misconceived.”
Vodafone Idea is also grappling with additional liabilities of around ₹1.19 lakh crore, including dues from the 2021 spectrum auction. In a recent letter to the Department of Telecommunications, Vi CEO Akshaya Moondra issued a stark warning: without timely support from the government, the company may not survive beyond FY26.
“Without GoI’s timely support on AGR, VIL will not be able to operate beyond FY26,” Moondra wrote. He further warned that a collapse would freeze capital expenditures, reduce the subscriber base, hit earnings, and ultimately render the government’s equity stake worthless.
Perhaps most significantly, Moondra cautioned that Vi’s exit could turn India’s telecom sector into a duopoly—leaving just Reliance Jio and Bharti Airtel to dominate the market. That could have far-reaching implications for competition, pricing, and future spectrum auctions.
As the government weighs its next move, the fate of India’s third-largest telecom operator—and the competitive balance of the entire industry—hangs in the balance.
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