The government is preparing to give another big relief to the telecom sector. In December 2024, the government had waived bank guarantee requirements for past spectrum dues to telecom operators. Now it is considering another relief proposal. Under this, a large part of the Adjusted Gross Revenue (AGR) dues imposed on companies like Voda Idea and Bharti Airtel after the Supreme Court’s decision in 2019 will be waived. Moneycontrol has received this information from sources. If this happens, the telecom sector will get great financial relief.
What is the proposal?
A senior telecom executive said that the Finance Ministry, Telecom Department and Cabinet Secretariat are discussing to provide relief to the telecom sector. No timeline has been set regarding relief, but everyone is agreed that telecom companies should be given relief in the matter of AGR. The source said that many telecom companies including Voda Idea had informed about their financial problems in several meetings with the Department of Telecommunications.
According to the source, the proposal includes 50 per cent waiver of interest as well as 100 per cent waiver of penalty on fines and penalties. If this happens, there will be relief of more than Rs 1 lakh crore from telecom operators, out of which half the benefit will go to Voda Idea. After getting the relief, Voda Idea’s AGR dues may reduce by more than Rs 52,000 crore, while Bharti Airtel’s dues may reduce by around Rs 38,000 crore and Tata Teleservices’ dues by around Rs 14,000 crore.
Problems increased after Supreme Court’s decision
In October 2019, the Supreme Court accepted the government definition of AGR as correct and due to this, telecom companies owed Rs 1.47 lakh crore. Of this, Rs 92,642 crore was license fee and Rs 55,054 crore was spectrum usage charges. The special thing is that 75% of this dues was of interest, fine and interest on penalty. Vodafone Idea is in the biggest trouble. This is because the time to repay AGR dues starts from FY 2026 and industry estimates suggest that Voda Idea’s AGR dues could reach ₹80,000–₹85,000 crore by March 2025. This figure could be ₹42,000–₹44,000 crore for Bharti Airtel and ₹17,000–₹19,000 crore for Tata Teleservices.
Voda Idea CEO Akshay Mundra had revealed in September 2024 that fresh talks have been initiated with the government after the company rejected a curative petition it had filed with the Supreme Court for recalculation of AGR. In December 2024, the government waived bank guarantee requirements for past spectrum dues, freeing up Rs 24,800 crore and creating space for lenders to extend additional credit, reducing financial pressure on Voda Idea.
Good news for Vodafone Idea customers! 5G service will be launched in March, plans will be cheapest