Why Vodafone Idea's future is uncertain in India
What's the story
Vodafone Idea (Vi) is unlikely to get any more financial relief from the Indian government on its adjusted gross revenue (AGR) dues, which are around ₹84,000 crore. The Department of Telecommunications (DoT) officials told Business Standard that the company is still in talks with the Centre, but any relaxation in payment schedule, especially for FY26 dues, seems unlikely.
Relief measures
Any more concessions would require policy change
A senior DoT official said that the government had already converted ₹36,950 crore of Vi's dues into equity under the 2021 telecom relief package. This made it the biggest shareholder with a 49% stake in the company. The move was aimed at giving Vi some breathing space during the moratorium period. However, any further concessions would need a policy change applicable to all telecom operators including Bharti Airtel which has also sought equity conversion of dues.
Financial challenges
Vi's cash flow situation
Vi is due to start annual AGR payments from March 2026 to 2031, with the first installment being over ₹18,000 crore. This is much higher than its current cash flows. The firm continues to post quarterly losses and is finding it hard to raise ₹35,000 crore in debt funding for a ₹50,000-55,000 crore capex plan.
Funding difficulties
What did Vi's CEO say?
Vi's CEO Akshaya Moondra recently admitted that lenders are hesitant due to the uncertainty surrounding the AGR issue. Despite the media reports, Vi confirmed last week that it had not received any communication from the Modi government regarding relaxed payment terms. Also, Telecom Minister Jyotiraditya Scindia has ruled out increasing the Centre's stake in the company.