Vodafone Idea AGR dues: Cabinet approves five-year moratorium, govt panel to reassess dues, say sources

Vodafone AGR dues

• Cabinet approves 5-year moratorium on Vodafone Idea's AGR dues
• Vodafone Idea's outstanding debt frozen as part of relief package
• Government now holds nearly 49 percent stake in Vodafone Idea

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The Union Cabinet has on December 31 approved a plan to freeze adjusted gross revenue dues of Vodafone Idea Ltd at Rs 87,695 crore as of December 31, rescheduling the repayment over FY2032–41, while also opening the door to a reassessment of the dues by a government-appointed panel, government officials said, requesting anonymity.

As part of the decision, the Department of Telecommunications (DoT) will reassess the dues based on deduction-verification guidelines and audit findings, with a committee appointed by the government to determine the final payable amount, a ruling that will be binding on both the company and the Centre.

The decision to offer relief was taken in public interest and the need to avoid excessive concentration in the telecom sector, government sources told Moneycontrol.

The decision follows the Supreme Court's observations that reconsideration of AGR-related issues falls within the policy domain of the Union Government, considering the interest of 20 crore consumers.

As per the Cabinet decision, AGR dues of Vodafone Idea frozen as on December 31, 2025, amounting to Rs 87,695 crore, will be rescheduled for payment over the period from FY 2031-32 to FY 2040-41. AGR dues of FY18 and FY19 shall be payable by the company over the next five years.

AGR dues frozen as of December 31, 2025, will be reassessed by the Department of Telecommunications in accordance with the Deduction Verification Guidelines dated February 3, 2020, based on audit reports, sources said.

Officials added that these step also protect the Government of India's 49% equity stake in Vodafone Idea and enable orderly payment of dues.

Vodafone Idea dues:

Vodafone Idea has been struggling with dues. The debt-laden operator has repeatedly warned it cannot survive without funding support, as banks remain wary of lending given its financial stress. Vi employs over 18,000 people and has nearly 198 million subscribers.

Few weeks ago, the Supreme Court allowed the government to comprehensively reassess and reconcile all dues of the debt-ridden telecom company, including interest and penalties, up to FY17. This was seen as a major relief for the financially stressed operator.

In September, Vodafone Idea had sought a waiver of penalty and interest on an AGR demand worth Rs 9,450 crore raised by the Department of Telecommunications (DoT), arguing that much of it pertained to the pre-FY17 period already settled by the apex court in 2020. Out of this amount, Rs 2,774 crore relates to post-merger liabilities of Vodafone Idea, while Rs 5,675 crore pertains to pre-merger dues of the Vodafone Group.

The government became the largest shareholder in Vodafone Idea in March this year after converting dues worth Rs 36,950 crore into equity, taking its stake to nearly 49 percent. Earlier, in 2023, the Centre had picked up a 33 percent stake in lieu of statutory dues exceeding Rs 16,000 crore.

The shares of the telecom major sharply plunged over 11 percent after the reports surfaced.