Centre Freezes Vodafone-Idea’s Dues, Grants 5-Year Lifeline on Telecom Payments

Guwahati: The Union Government on Wednesday approved a five-year moratorium for Vodafone Idea, freezing the company’s outstanding dues, providing a critical lifeline to the debt-laden telecom operator.

The Union Cabinet, headed by Prime Minister Narendra Modi, agreed to freeze AGR dues of Vodafone-Idea Ltd (VIL) at Rs 87,695 crore, which the struggling company has to start paying from 2031-32 fiscal and clear by 2040-41, reports said.

AGR are the payments owned by telecom companies to the government based on Adjusted Gross Revenue (AGR).

Under this, Vodafone Idea will not have to make AGR-related payments immediately. The frozen dues will be spread over a 10-year period from FY32 to FY41, with no interest accruing during the moratorium, giving the company crucial breathing space to manage its debt-laden balance sheet and operational challenges.

Reportedly, AGR dues for FY2017-18 and FY 2018-19 that were finalized based on the Supreme Court order of September 2020 will now have to be paid over 2025-26 to 2030-31 fiscal without any change.

Vodafone Idea has been suffering financial crisis for a long time. Factors like price competition, high debt, and massive AGR liabilities arose from a change in the definition of AGR.

The company has struggled with persistent losses, a shrinking subscriber base, and limited ability to invest in network expansion, even as rivals accelerated 4G and 5G rollouts.

Further reports say that the Telecom Company will review the AGR frozen as of December 31, taking into account the Deduction Verification Guidelines and audit reports, giving Vodafone Idea room to manage its long-term liabilities.

Repeated rounds of government relief and equity conversion of dues have kept the company afloat, but its long-term viability continues to hinge on sustained policy support, fresh capital infusion, and a turnaround in operating performance.

A committee appointed by the government will decide on the outcomes, based on audit reports, sources said.

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