Vodafone Idea is increasingly finding it difficult to operate beyond FY26. On April 17, 2025, the beleaguered telco sent a letter to the Telecom Department, making a compelling case for urgent support. They warned that "no support will lead to a point of no return." The recent AGR judgment has severely impacted the company's financial stability and overall business health, adding an unfair burden through the AGR liability. This situation has left Vodafone Idea in a position where it can’t survive without addressing the AGR liability issue. Compounding the problem, the Supreme Court on May 19 rejected Vodafone Idea's plea for a waiver of around Rs 30,000 crore in adjusted gross revenue (AGR) dues.
How it will impact Vodafone Idea users
If the government does not provide support and VIL is unable to settle its AGR obligations, the company may have to enter the National Company Law Tribunal (NCLT) process. This could affect about 20 crore users, forcing them to port their numbers elsewhere. Such an outcome would also negatively impact market competition and consumer choice, as the exit of Vi could lead to a duopoly in the Indian telecom sector.
Vodafone Idea is urgently calling for a timely resolution of the AGR matter, along with acceptance of its request for liquidity support through measures like a spectrum moratorium and extension.
What is AGR dues
The AGR issue arises from a long-standing dispute regarding revenue definitions. The government asserts that all revenue earned by operators—including core telecom services, dividends, profits from asset sales, and rent—should be included as revenue, which telecom operators dispute.
In 2019, the Supreme Court ruled in favour of the government, imposing hefty dues on telecom companies. While the government has attempted to provide relief through moratoriums and prospective AGR redefinitions, the sector remains under strain, with Vodafone Idea particularly exposed. Jio and BSNL are not affected by the AGR issue as Jio entered the market in 2016 and cleared its due while BSNL operates under a different framework.
The outcome of this issue will significantly influence India's telecom landscape, the level of competition, and efforts towards digital inclusion.
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