Daijiworld Media Network - New Delhi

New Delhi, Jan 9: Vodafone Idea (Vi) will pay the government Rs 1,144 cr over the next 10 years, while its remaining adjusted gross revenue (AGR) dues amounting to Rs 87,695 cr have been frozen and will be repaid in instalments starting March 2036, the company said on Friday.

According to Vi, the Union Cabinet has approved the freezing of its AGR dues, with repayments scheduled from FY2031-32 to FY2040-41. The government has also granted the telecom operator a six-year window, from FY2025-26 to FY2030-31, to clear AGR dues pertaining to 2017-18 and 2018-19 without any change.

In a regulatory filing, Vi said its entire AGR liability — including principal, interest, penalty and interest on penalty for the period from 2006-07 to 2018-19 as of December 31 — will be frozen and repaid in phases. The company said it will pay a maximum of Rs 124 cr annually from March 2026 to March 2031, followed by Rs 100 cr annually from March 2032 to March 2035. The remaining dues will be paid in equal annual instalments from March 2036 to March 2041.

The relief provides a significant lifeline to the debt-laden telecom operator, which would otherwise have faced payments of around Rs 18,000 cr by March 2026 and similar amounts every year for the following six years without government support.

Earlier, Vi had informed the Department of Telecommunications that its total liabilities to the government stood at around Rs 2 lakh cr, including Rs 1.19 lakh cr in spectrum dues. The company had warned that without relief, the Centre risked major losses, including non-recovery of spectrum and AGR dues, along with erosion of equity value worth over Rs 53,000 cr.

Vi’s annual liabilities have been more than double its operational cash generation, which has ranged between Rs 8,400 cr and Rs 9,200 cr over the past three years. The company also said a DoT-appointed committee will reassess the AGR dues, with its decision being final. The reassessed amount will be repaid between March 2036 and March 2041 in equal instalments.

Analysts said the government’s move could ease funding pressures on the company. A Citi report noted that the relief may help fast-track Vi’s planned Rs 25,000 cr bank debt raise and potentially enable another equity infusion, while boosting confidence in its ability to continue operations and invest in network expansion. Ambit Capital said decisive government action and potential upside from reassessment would support Vi’s efforts to raise bank funding essential for survival and capital expenditure.