Vodafone Idea shares jump 8% after AGR payment relief plan
What's the story
Vodafone Idea shares rose 8% to a high of ₹12.4 after the telco announced a detailed timeline for repaying its dues, including adjusted gross revenue (AGR) liabilities. Vi has confirmed that its AGR dues from FY 2006-07 to FY 2018-19 will be frozen from December 31, 2025. The telecom operator will pay ₹124 crore annually from March 2026 to March 2031. After this period, the company will pay ₹100 crore annually over four years (March 2032-March 2035).
Payment schedule
Vodafone Idea's AGR dues payment plan
Vodafone Idea's remaining dues will then be paid in equal annual installments from March 2036 to March 2041. The Department of Telecommunications (DoT) will constitute a committee to reassess AGR liabilities with any revised dues payable over a six-year period commencing March 2036. The decision of this committee will be final and binding on all parties involved.
AGR explanation
Understanding AGR dues in the telecom sector
AGR dues are payments that telecom companies owe to the government based on their Adjusted Gross Revenue (AGR). This revenue is used by telecom operators to pay license fees and spectrum usage charges. It includes all revenues, including non-telecom income such as interest, rent, and asset sales. Vodafone Idea has been struggling with persistent losses, a declining subscriber base, and limited investment capacity for network expansion due to intense price competition and huge AGR liabilities.
Financial struggles
Vodafone Idea's financial challenges and government intervention
Vodafone Idea has been facing a number of challenges, including persistent losses and a shrinking subscriber base. The company's limited ability to invest in network expansion has also been an issue as rivals accelerated their 4G and 5G rollouts. In December, the Indian government had approved a partial moratorium on Vodafone Idea's dues, freezing payments worth about $9.76 billion and deferring most repayments into the 2030s.