DoT Knocks on PMO’s Door for Final Call on Vodafone Idea AGR Relief

The Department of Telecommunications (DoT) has written to the Prime Minister's Office (PMO) to take a final decision on relief measures for Vodafone Idea (Vi). The telecom operator says it needs to pay ₹1,99,140 crore in spectrum and adjusted gross revenue (AGR) dues.

According to Mint, the DoT has proposed “multiple relief options" for the company. These include a two-year extension on the moratorium, a waiver on penalties and interest on AGR payments, and the option of smaller instalments, as per an official cited by the newspaper.

The company must pay its AGR liability in six equal instalments after the current moratorium period, starting from March 31, 2026.

Vi reportedly owes about ₹83,400 crore in AGR dues to the government, with annual payments of around ₹18,000 crore scheduled to begin next March. Vodafone has previously said that banks are unwilling to lend more given the massive dues, and that it will be unable to survive beyond a year without such funding.

The firm has been seeking additional government relief since April, when the government converted about ₹36,000 crore in AGR dues into equity, raising its stake in the company to 49%.

However, Communications Minister Jyotiraditya Scindia has said the government cannot convert more of Vodafone Idea’s dues into equity. Still, during the company’s first-quarter earnings call, the outgoing CEO told analysts that the government has always extended support closer to critical payment deadlines and expressed hope of resolving the AGR issue again.

"I think in the past, we have always seen that the government has been supportive. You look at 2019, deferment of spectrum instalments; 2021, reforms package; 2023, conversion of government dues to equity; 2025, again conversion of dues to equity. Generally, these actions have happened closer to the time when it is essentially needed," he said.

According to Nuvama, investor attention is primarily on the long-delayed debt fundraising, which is crucial to support capex alongside upcoming AGR and spectrum obligations.

"While parameters such as the pace of subscriber loss and ARPU also need to improve, balance sheet repair has become highly crucial for Vi’s survival," the brokerage said in a note on August 18.

As of June 30, Vi’s deferred payment obligations towards spectrum (payable until FY44) and AGR dues (until FY21) totaled ₹1,99,140 crore. AGR instalments due in FY26 amount to ₹16,428 crore, while spectrum-related instalments payable by June 2026 are ₹2,641 crore. Bank debt due by June 2026 stands at ₹1,715 crore, excluding interest, with ₹211 crore reclassified as short-term borrowings due to covenant breaches.