New Delhi: In a major relief for debt-laden Vodafone Idea, the government has capped the company’s annual payouts to clear past dues at Rs 124 crore over the next six years, easing near-term cash flow pressures.
The telecom operator said on Friday that between March 2032 and March 2035, the yearly outgo will be further reduced to Rs 100 crore, citing a communication from the Department of Telecommunications (DoT).
Vodafone Idea said the remaining adjusted gross revenue (AGR) dues will be paid in equal annual instalments over six years starting March 2036, after a reassessment by a DoT-appointed committee.
The Union Cabinet had on December 31 approved a partial moratorium on the company’s past dues, freezing them at Rs 87,695 crore to be cleared between 2031-32 and 2040-41.
The clarification on the payment schedule lifted Vodafone Idea shares by about 9 per cent in morning trade, though the stock later pared gains amid concerns over funding needs for 5G expansion. Shares closed at Rs 11.27 on the BSE, down 2 per cent.
The Cabinet’s relief measures aim to protect government interests — it holds about 48.9 per cent in the telco — ensure orderly payment of spectrum and AGR dues, maintain competition in the telecom sector and safeguard services for nearly 20 crore Vodafone Idea subscribers.
The company said AGR dues for 2017-18 and 2018-19, finalised following a September 2020 Supreme Court order, will be paid over the 2025-26 to 2030-31 period, with annual payouts of Rs 124 crore. Overall, Vodafone Idea will pay about Rs 1,144 crore over the next 10 years, with the bulk of frozen dues payable from March 2036 onwards.
Vodafone Idea has been grappling with high debt, intense price competition and large AGR liabilities, limiting its ability to invest in networks even as rivals roll out 5G services. Without relief, the company faced annual payments of around Rs 18,000 crore by March 2026.
Analysts expect the reassessment of AGR dues to reduce liabilities and help Vodafone Idea raise up to Rs 25,000 crore in bank funding. Reports from Citi and Ambit Capital said the government’s action could improve the company’s ability to service dues, revive network investments and support its
survival.