Vodafone Idea Warns of Inability to Operate Beyond Fiscal Year 2026

Telecom operator Vodafone Idea Limited (Vi) has issued a stark warning to the Department of Telecommunications (DoT), stating that it may cease operations beyond the fiscal year 2026 unless it receives government assistance regarding its adjusted gross revenue (AGR) dues. In a letter dated April 17, 2025, Vi’s CEO, Akshaya Moondra, emphasized the urgency of the situation, noting that ongoing discussions with banks for funding would be jeopardized without timely government support. The company is also seeking a waiver of approximately ₹30,000 crore in AGR dues from the Supreme Court, which has agreed to hear the case on May 19.

Urgent Need for Government Support

Vodafone Idea has made it clear that without immediate financial assistance, its ability to operate will be severely compromised. The company warned that discussions with banks for necessary funding would stall, leading to a halt in operational improvements and capital investments. Vi stated that the funds raised over the past year would be depleted, effectively stopping its capital expenditure cycle. The company highlighted that if it cannot meet its AGR obligations, it may face insolvency proceedings under the National Company Law Tribunal (NCLT), which could disrupt services and devalue its network and spectrum assets. This situation could force approximately 200 million subscribers to switch to other providers if services are interrupted.

Impact on Employment and Investments

Vodafone Idea’s potential collapse could have far-reaching consequences, not only for its subscribers but also for the broader economy. The company stressed that timely government support would protect the interests of around 200 million users and safeguard jobs for approximately 30,000 employees. Additionally, it would help preserve the investments of over 6 million shareholders. The government, which holds a 49% equity stake in the company, stands to incur significant losses if Vodafone Idea is unable to continue its operations. The company warned that the value of the government’s stake could diminish to nothing without intervention.

Maintaining Market Competition

In its communication to the government, Vodafone Idea reminded officials of the importance of maintaining a competitive telecom market with three private players. The company argued that reducing the sector to a duopoly would negatively impact competition and consumer choice. Furthermore, it would hinder future spectrum auctions, which are a vital source of revenue for the government. Vi urged the government to consider its proposal for relief, which includes a waiver of interest and penalties on AGR dues, and a structured payment plan for the remaining dues.

Proposed Relief Measures

Vodafone Idea has outlined a comprehensive relief proposal to the government. The company is requesting that the principal AGR demand, as per the DoT until FY19, amounting to ₹17,213 crore, be considered final. It has proposed that the remaining AGR dues of ₹7,852 crore be paid over a 20-year period without accruing further interest. Additionally, Vi is seeking a five-year moratorium on spectrum installment payments and a one-year extension for payments related to spectrum acquired before the 2021 auction. These measures, the company argues, are essential for its survival and the continued provision of services to millions of users across India.

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