Vodafone Idea unveils repayment schedule for AGR dues after DoT lifeline

By Admin

10 Jan, 2026

A crucial relief for a stressed telecom operator
Vodafone Idea Ltd. has laid out a long-term repayment schedule for its adjusted gross revenue (AGR) dues over the next 15 years, significantly easing the financial pressure that has weighed on the company since its 2018 merger. The move follows a critical intervention by the Department of Telecommunications (DoT), which has effectively frozen the company’s AGR liabilities as of 31 December 2025.

This decision is being viewed as a financial lifeline for Vodafone Idea, which has not reported a profit since the merger of Vodafone Group Plc’s India unit and Idea Cellular Ltd. of the Aditya Birla Group.

DoT decision freezes AGR overhang
According to a stock exchange filing, the DoT has frozen Vodafone Idea’s AGR dues   including principal, interest, and penalties accrued between FY2007 and FY2019   as on 31 December 2025. The repayment schedule, approved by the DoT, allows the company to spread its payments over a much longer horizon, preserving near-term cash flows for operations and network investments.

The government currently holds a 49% stake in Vodafone Idea, acquired through conversion of deferred dues into equity, underscoring the strategic importance of keeping a third private telecom operator alive in India’s competitive market.

Detailed AGR repayment schedule
Under the approved plan, Vodafone Idea will follow a phased repayment structure:

• From March 2026 to March 2031, the company will pay a maximum of ₹124 crore annually.
  
  

• From March 2032 to March 2035, the annual payment cap will reduce to ₹100 crore.
  
  

• The remaining dues will be repaid in equal annual instalments between March 2036 and March 2041.
  
  

In addition, the DoT will constitute a committee to reassess Vodafone Idea’s total AGR dues. The committee’s decision will be final, and any reassessed amount will be amortised over a five-year period ending in 2041.

Moratorium and market reaction
On 31 December, the government approved a partial moratorium on Vodafone Idea’s dues, freezing approximately $9.76 billion (around ₹87,000 crore) in payments and deferring major repayments into the 2030s. At the time, the company had stated it had not received formal communication on the measure.

The restructuring announced now has been welcomed by investors. The stock surged nearly 10% following the news, reflecting optimism that the company can stabilise operations without the immediate burden of large regulatory payouts.

Diplomatic undertones and broader context
The development is also being seen by some observers as a calculated diplomatic gesture towards the United Kingdom, following UK Prime Minister Keir Starmer’s visit to India in October. India and the UK signed a major trade deal last year, the largest since Brexit, and Vodafone’s UK roots add a geopolitical layer to the government’s supportive stance.

Understanding the AGR issue
AGR dues have been at the heart of India’s telecom stress. Telecom operators pay a percentage of their annual revenue as licence fees and spectrum usage charges. While companies have argued that AGR should include only telecom services revenue, the DoT has maintained that it includes all income, such as rent, interest, and asset sales.

In 2019, the Supreme Court of India ruled in favour of the DoT’s definition, triggering massive retrospective dues for telecom companies.

Vodafone Idea’s debt burden
Vodafone Idea was the hardest hit by the ruling, operating in a market dominated by Reliance Jio Infocomm Ltd. and Bharti Airtel Ltd.. As of now, the company’s total debt is estimated at around ₹2 lakh crore, comprising:

• AGR dues of approximately ₹70,000–80,000 crore
  
  

• Spectrum liabilities of about ₹1.4 lakh crore
  
  

As on 30 September, Vodafone Idea reported a negative net worth of ₹82,460 crore, raising repeated concerns over its ability to continue as a going concern.

Government stake as a stabilising factor
To prevent the Indian telecom market from sliding into a duopoly, the government stepped in. In February 2023, it converted around ₹16,000 crore of interest on deferred dues into a 33% equity stake. In March 2025, another ₹36,950 crore was converted, taking the government’s holding to 49%.

Despite being the largest shareholder, operational control remains with the Aditya Birla Group and Vodafone Group.

Legal timeline in the AGR case

• 2019: Supreme Court upholds the DoT’s AGR definition.
  
  

• 2020: Telcos are granted 10 years to pay AGR dues.
  
  

• September 2024: Vodafone Idea’s curative petition on calculation errors is dismissed.
  
  

• October 2025: Supreme Court allows the government to reconsider AGR dues, citing changed circumstances due to government shareholding.
  
  

• December 2025: AGR dues are frozen as of 31 December, with major payments deferred.
  
  

Fundraising outlook improves
Vodafone Idea has struggled to raise funds since the AGR verdict. In mid-2024, it raised ₹18,000 crore via a follow-on public offer and ₹3,300 crore through non-convertible debentures. Talks with banks for ₹50,000–55,000 crore in debt funding had stalled due to regulatory uncertainty.

With the AGR overhang now addressed, lender sentiment is expected to improve, potentially unlocking much-needed capital for the company’s survival and competitiveness.

Conclusion
The DoT-approved repayment schedule marks a turning point for Vodafone Idea. By deferring the bulk of AGR payments and spreading them over 15 years, the government has provided the company with breathing room to focus on operations, network expansion, and customer retention. While challenges remain, the restructuring significantly improves Vodafone Idea’s chances of staying afloat in India’s fiercely competitive telecom landscape.