Vodafone Idea, the debt-laden telecom operator, has received a significant reprieve on the bulk of its massive adjusted gross revenue (AGR) dues. However, a near-term financial obligation still looms. The company will need to pay between ₹700 to 800 crore in AGR dues specifically related to the financial years 2018 and 2019 over the next six years, which includes the current fiscal year.
The Immediate AGR Liability
This immediate payment is separate from the colossal ₹87,695 crore in AGR dues as of 31 December 2025, which the Union Cabinet has effectively frozen. The government has allowed Vodafone Idea to defer this enormous sum, with payments now scheduled between FY32 and FY41. Officials familiar with the matter clarified that while the Supreme Court's landmark September 2020 order crystallised AGR dues only up to FY17, the calculation tables included figures for FY18 and FY19. Consequently, the dues for these two years remain payable.
"The amount is small compared to the substantial relief it will have from the timeline extension to pay its huge AGR dues," a government official stated, highlighting the relative scale of this obligation against the broader debt.
Reassessment Process and Funding Challenges
The Department of Telecommunications (DoT) is now embarking on a detailed, circle-by-circle reassessment of the frozen ₹87,695 crore AGR liability. This complex exercise, which will also examine the historical subsidiaries and licenses linked to the merged entity, is expected to take four to five months. The final amount after this reassessment is anticipated to be lower.
However, this timeline is critical. Any delay in finalising the total liability could severely complicate Vodafone Idea's ability to raise external funding, which is desperately needed for network investments and 5G rollout. Independent telecom analyst Parag Kar pointed out that debt comes with interest burdens, while equity investors require clear visibility on outstanding liabilities before committing funds. This challenge is compounded by the fact that annual spectrum instalments are set to rise sharply from FY27 onwards.
Market Reaction and Analyst Outlook
The market's initial reaction to the Cabinet's relief package was negative, reflecting investor disappointment over the lack of a waiver on the principal AGR amount. Vodafone Idea's stock plunged 11.5% on the National Stock Exchange following the announcement, though it recovered partially the next day.
Brokerage firm Emkay Global maintained a 'sell' rating on the stock, noting that the relief package did not include the anticipated 50% waiver on pending dues. In a note, they emphasised that Vodafone Idea still faces ₹1.2 trillion in deferred spectrum payment obligations between FY26 and FY44. The company's current EBITDA is insufficient to meet both capital expenditure and spectrum debt repayment requirements, indicating a continued need for additional relief or funding.
The DoT's reassessment outcome will be decided by a government committee and will be binding on both parties. The department will also need to inform the Supreme Court of the final relief measures granted to the company. Officials indicated that the recent operational crisis at IndiGo, another vital sector, prompted the government to act swiftly to ensure healthy competition in the telecom industry by providing Vodafone Idea with a viable path forward.
