New Delhi: The Union Cabinet, led by Prime Minister Narendra Modi, has approved a major relief package for Vodafone Idea, bringing much needed support to the struggling telecom company. According to a PTI report quoting sources, the government has frozen Vodafone Idea’s adjusted gross revenue, or AGR, dues at Rs 87,695 crore. These dues will now be paid over a long 10 year period, starting from financial year 2032 and ending in financial year 2041.
AGR Dues to Be Reassessed by Telecom Department
As per the report, Vodafone Idea’s AGR dues have been frozen as of December 31. The Department of Telecommunications will reassess these dues to ensure accuracy. However, AGR payments related to financial years 2018 and 2019 will remain unchanged. These amounts will be paid by the company between financial years 2026 and 2031.
This decision gives immediate relief to Vodafone Idea, which has been facing serious financial stress due to heavy statutory payments and weak cash flow.
Company Under Heavy Financial Pressure
Vodafone Idea has been struggling for years under the burden of debt, spectrum fees, and AGR liabilities. The company currently owes around Rs 83,400 crore in AGR dues, with yearly payments of nearly Rs 18,000 crore scheduled to begin from March 2025. The operator has repeatedly warned that it cannot survive without financial support, as banks are hesitant to lend due to its weak balance sheet.
Despite its problems, Vodafone Idea remains a major telecom player, employing more than 18,000 people and serving around 198 million subscribers across India.
Market Reaction and Pending Announcements
Following news of the Cabinet decision, Vodafone Idea shares were trading nearly 10.61 percent lower at Rs 10.78 on the NSE around 3:17 pm. Investors remain cautious as the company has not yet issued an official statement, and a formal government announcement is also awaited.
Supreme Court Decision Added Hope Earlier
Vodafone Idea, a joint venture between the Vodafone Group and the Aditya Birla Group, has faced challenges since the Supreme Court’s 2019 ruling on the definition of AGR. However, a few weeks ago, the Supreme Court allowed the government to fully reassess and reconcile the company’s dues, including interest and penalties, up to financial year 2017. This move was seen as an important step toward easing Vodafone Idea’s financial burden.
