Vodafone Idea CEO says AGR overhang trapped telco in ‘vicious cycle’, unveils 3-year reset plan

Vi’s AGR dues have been frozen at Rs 87,695 crore as of December 31, 2025, with a staggered and back-ended repayment schedule over 10 years

• Vodafone Idea unveils a 3-year reset plan to restore growth and profitability
• Vi to invest Rs 45,000 crore for network expansion and 5G rollout
• AGR dues frozen with a 10-year staggered repayment schedule

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Vodafone Idea’s prolonged AGR burden had pushed the telco into a “vicious cycle” of funding constraints, underinvestment and customer losses — but the worst is now behind it, CEO Abhijit Kishore said, unveiling what he called a three-year reset plan aimed at restoring growth and profitability.

For years, the uncertainty around adjusted gross revenue (AGR) dues kept lenders wary, limiting capital access and slowing network expansion. “The AGR overhang meant funding was not available. Without funding, investments and deployments suffered. That hurt network experience, impacted brand perception and led to subscriber losses,” Kishore said during the analyst and investor meeting on January 28. “That has been the cycle we were stuck in.”

The cycle, he argued, has now been broken by three developments. The first was Vi’s Rs 3,300 crore fundraise through non-convertible debentures (NCDs), secured even before AGR clarity emerged.

The second was the extension of the contingent liability adjustment mechanism (CLAM) with promoter Vodafone Plc. Originally capped at Rs 8,400 crore for seven years post-merger and expiring in June 2025, the agreement has now been extended until December 31, 2025. Of the remaining Rs 6,400 crore, Rs 2,300 crore will be infused in cash over the next 12 months, while shares worth Rs 328 crore have been earmarked for monetisation.

The third — and most critical — trigger is the AGR relief framework. Vi’s dues have been frozen at Rs 87,695 crore as of December 31, 2025, with a staggered and back-ended repayment schedule over 10 years. Annual payments will be capped at Rs 124 crore for the first four years, followed by Rs 100 crore annually for the next four, with the reassessed balance payable in six equal instalments between FY36 and FY41.

“This is a definitive, long-term solution with clear visibility on cash flows,” Kishore said, adding that the relief strengthens not just Vi but India’s broader digital infrastructure ecosystem.

Vi 2.0 reset

With regulatory uncertainty easing, Kishore declared a “Vi 2.0 reset” and laid out a three-year roadmap built around what he called the “1-2-3” framework: sustained customer additions, double-digit revenue growth and tripling EBITDA.

To deliver this, Vi will invest Rs 45,000 crore over the next three years — in addition to Rs 18,000 crore already invested over the past six quarters — taking total planned investment to over Rs 60,000 crore in roughly four years.

The bulk of the new capital will go toward aggressive network expansion. Vi plans to achieve 4G parity with competitors across its 17 priority circles — which contribute over 99% of revenue — within 12 to 24 months. Simultaneously, it will expand 5G coverage across urban markets with populations above 20,000 over the next 12–30 months.

The company also aims to convert remaining 2G sites to 4G in select circles, expand fixed wireless access (FWA) offerings for home and small-office users, and prepare for satellite communication services through its partnership with AST SpaceMobile, which Kishore expects to materialise over the next 18–24 months.

Since its follow-on public offer (FPO), Vi has already invested Rs 16,000 crore, adding over 100,000 sites, increasing capacity by 43% in key markets and expanding population coverage from 77% to about 86 percent. The company has launched 5G in 43 cities, with Kerala becoming the first fully covered circle.

Operational metrics are showing early signs of improvement. Annual subscriber losses, which had averaged 15–16 million over recent years, have narrowed to 5.3 million so far this year. Excluding a deliberate slowdown in low-quality customer additions in one quarter, net losses were just 1.5 million — a swing of nearly 12 million compared to prior trends.