Will India’s government throw Vi another lifeline?

Details: Vaughan O'Grady; Category: Regulation; 06 January 2026; 2441 views

Though it does not yet seem to have been formally confirmed by the Indian government, beleaguered operator Vodafone Idea (Vi) has apparently been granted a ten-year grace period before it has to pay more than 95% of its adjusted gross revenue (AGR) dues.

India’s Economic Times has said that it has been told that the government has frozen Vi's AGR dues at INR876.95 billion (about US$9.72 billion) from 31 December last year.

The next step will be the formation of a committee (this will take three to four months) to reassess dues. After the reassessment, it has been claimed, the frozen amount will go down substantially. It will then have to be paid over the periods covered by the 2036-41 financial years.

However, well before the 2036 financial year it seems that Vi is expected to be paying other outstanding AGR dues that predate the frozen ones. These are smaller repayments amounting to about US$12.6 million a year for six years and then approximately US$11.1 for another four years until the 2035 financial year. Spectrum auction dues will also be required.

Thus this plan doesn’t solve all of Vi’s financial problems but the implication is that some outstanding debt may be cut after the committee meets and that the company will also have more time to deal with these issues and get itself in better financial shape.

The move, if it happens, is in part due to a Supreme Court ruling we reported last October that allowed the government to address the operator's grievances and reassess ongoing demands for AGR dues without judicial intervention.

Now, however, a number – possibly hundreds – of ISPs and non-telecoms-related firms have felt encouraged to request AGR relief. Department of Telecommunications (DoT) officials have apparently responded by suggesting that the package to Vi has been given in response to the court order, and that it applies to Vi only.

It’s not clear whether this move will have a strongly positive effect, but it does at least push the whole issue back a few years. Some sort of action was always likely in any case. After all, the government has a majority 49% stake in Vi, which makes any prospect of Vi going under highly undesirable, even before taking into account the disastrous effect on jobs and competition such an outcome could mean.