Supreme Court allows govt to consider relief on Vodafone Idea’s AGR dues reassessment.
Vi owes ₹83,400 crore, rising to ₹2 lakh crore with interest, penalties.
Company seeks relief citing inflated dues and financial strain to fund 4G–5G expansion.
Tillman Global may invest ₹35,000–52,800 crore, contingent on full AGR relief.
After telecom major Vodafone India sought relief on both additional AGR dues and reassessment of all pending dues, the Supreme Court clarified that the government is free to consider granting relief on the dues.
Following this, shares of Vi jumped 14% to an intraday high of ₹9.96 apiece on Monday, witnessing the biggest single-day gain for the stock since April 2024.
What did SC Say and How Much AGR Dues Does VI Owe?
The apex court said that the government is free to consider relief on both additional and reassessment of the AGR dues.
According to a Mint report, Vodafone Idea AGR dues amount to ₹83,400 crore, with annual payments of ₹18,000 crore set to begin next March. This amount goes up to a massive ₹2 lakh crore, including penalty and interest.
Why is VI Asking for Relief on AGR Dues?
After months of battle at the court, the telecom major has asked for relief on its AGR dues case. There are multiple reasons behind this move including massive financial crunch, dues being unfairly inflated, etc.
Currently under massive dues, it is essential for VI to get relief to ensure financial viability and avoid insolvency.
The AGR dispute comes from the argument that whether non-core income like rent, interest, or profit from asset sales should be included in telecom revenue. In connection to that, Vi and some of the other telcos have maintained that the government’s broad definition massively inflated their dues.
Even though the Supreme Court upheld the government’s view in 2019, the telecom major argues that the interest, penalties, and compound interest together make the total amount ‘exorbitant and disproportionate’.
Additionally, in order to stay competitive in the market, Vi needs to expand rapidly and thereby would need money to invest in 4G expansion and 5G.
The government is also considering offering limited relief to the telecom operator by reviewing and rectifying possible duplicate entries and calculation errors in its additional AGR dues, an NDTV Profit report stated.
This potential relief would be applicable only to the ₹9,450-crore additional demand raised for the period up to FY17, in line with the Supreme Court’s October 27 ruling that allowed a reassessment of discrepancies in the Department of Telecommunications’ demand calculations, the report said.
How will VI Dues Affect the Telecom Sector if not Resolved?
If Vodafone Idea’s AGR dues remain unresolved, the debt-laden company could face the risk of collapse or insolvency, which in turn will have a massive impact on the country’s telecom sector as the market will be left to be dominated by Jio and Airtel.
Most importantly, the fall of Vi would disrupt services for millions of subscribers, especially in rural areas and eventually lead to job losses across dependent industries such as tower, fibre, and equipment firms. Additionally, the government would lose long-term revenue from licence fees and spectrum charges, undermining both fiscal and digital inclusion goals.
Will VI Witness any Takeover of Operational Control?
According to an The Economic Times report, sources aware of the matter stated that US-based private equity firm Tillman Global Holdings (TGH) is in talks to invest ₹35,000–52,800 crore ($4–6 billion) in Vodafone Idea and take operational control of the cash-strapped, loss-making telecom operator.
However, the investment will only happen if the government offers a full relief package covering Vodafone Idea’s dues, including AGR and spectrum payments, the report mentioned.
Additionally, the report stated that the New York-based investment firm is not seeking a complete waiver of dues but a restructuring of liabilities to give the company some relief. It has also submitted a detailed proposal to the government.
