Vodafone-Idea (VI), one of India’s major telecom companies, is facing serious financial difficulties. The company is struggling to pay its Adjusted Gross Revenue (AGR) dues and spectrum charges, which are essential payments required by the telecom industry. Due to this crisis, Vodafone-Idea has now requested the Indian government for additional financial support to stay afloat.
Adjusted Gross Revenue (AGR) is a key financial term used in the Indian telecom sector. It refers to the revenue earned by telecom companies from their telecom services, after making certain deductions. It is used by the government to calculate the license fees and spectrum usage charges that telecom operators must pay.
According to media reports, Vodafone-Idea sent a letter to Telecom Secretary Neeraj Mittal on March 11, 2025. In this letter, the company has requested that a significant portion of its outstanding dues be converted into government equity. This means that instead of paying the government in cash, Vodafone-Idea is asking the government to take ownership of more shares in the company.
Currently, the government holds a 22.6% stake in Vodafone-Idea, but if this request is accepted, the government’s stake could increase to 49%, making it a major shareholder in the company. Vodafone-Idea has asked for help as per 2021 Telecom Relief Package.
What is the 2021 Telecom Relief Package?
The 2021 Telecom Relief Package was introduced to help struggling telecom companies by providing easier payment options for their dues. Vodafone-Idea is now seeking assistance under this package to manage its AGR and spectrum dues.
The company has dues worth ₹36,950 crore, including an immediate payment of ₹13,089 crore, which is due in the coming weeks. Vodafone-Idea has informed the government that it does not have enough money to make these payments and needs financial relief. However, the company has not officially commented on this matter yet.
How Much Relief Can Vodafone-Idea Get?
Reports suggest that the government is not in favor of providing relief on AGR dues for telecom companies. However, if Vodafone-Idea’s request is approved, experts estimate that the company could receive financial relief of ₹52,000 crore. This would significantly reduce Vodafone-Idea’s AGR liability by 75% and also decrease its total debt by 25%, helping the company regain financial stability.
Vodafone-Idea’s Past Legal Battle Over AGR Dues
Vodafone-Idea has been fighting a long legal battle regarding AGR dues. In July 2024, the company filed a petition in the Supreme Court, challenging the way its AGR dues were calculated. The company argued that the government had incorrectly included non-core revenue (income from sources other than telecom services) while calculating the dues.
However, in September 2024, the Supreme Court rejected Vodafone-Idea’s petition, leaving the company with no option but to pay the dues as demanded by the government.
Vodafone-Idea’s Financial Struggles
The company’s financial troubles are reflected in its recent earnings report. In the third quarter of FY 2024-25, Vodafone-Idea reported a net loss of ₹6,609 crore. Although this is a slight improvement compared to the ₹6,986 crore loss in the same quarter last year, the company is still under financial stress.
On the other hand, Vodafone-Idea’s revenue grew by 4.16%, reaching ₹11,117 crore in the October-December quarter. This increase in revenue is mainly due to tariff hikes and customers opting for higher-priced recharge plans.
Increase in Average Revenue Per User (ARPU)
Vodafone-Idea’s Average Revenue Per User (ARPU) is a key measure of how much money the company earns per customer. During the October-December quarter, the ARPU increased to ₹173, compared to ₹166 in the previous quarter (July-September).
This growth in ARPU is mainly due to:
✔️ Tariff hikes (increase in plan prices)
✔️ Customers opting for premium recharge plans
What Happens Next?
The fate of Vodafone-Idea now depends on whether the government accepts or rejects its request for financial relief. If the request is approved, the company could recover significantly. However, if the government does not agree, Vodafone-Idea will have to find alternative ways to raise funds or face further financial difficulties.
For now, all eyes are on the next Union Cabinet meeting, where a decision on this matter is expected. If approved, it could be a major turning point for Vodafone-Idea and the entire telecom industry.
