Vodafone Idea shares rally 10% as govt plans AGR dues waiver

Vodafone share price jumped as much as 10% on Monday to Rs 10.03 on the BSE as the government is considering a proposal to waive 50% of interest and 100% of penalties and interest on penalties that make up a bulk of the adjusted gross revenue (AGR) dues that were levied on telcos like Vodafone Idea and Bharti Airtel after the Supreme Court order of 2019.

Such a move, if implemented, would mark a watershed for the telecom business in India and will go a long way toward ensuring that the market doesn’t end up as a private sector duopoly, analysts said.

People familiar with the matter told ET that the move, if finalised, will offer financial relief of over Rs 1 lakh crore for telcos, more than half of which will accrue to distressed Vodafone Idea (Vi). The telco is staring at a repayment of thousands of crores of AGR dues to the government, starting FY26, raising questions about its viability.


Under the proposed relief, the AGR dues of Vi may come down by over Rs 52,000 crore; for financially robust Bharti Airtel, by nearly Rs 38,000 crore; and for Tata Teleservices, by around Rs 14,000 crore, said a second person. Reliance Jio doesn’t have any legacy AGR dues and is not affected by the proposed measure. Tata Tele no longer offers retail mobility services, only enterprise mobility services.

“The proposal is being discussed at the highest level including the finance ministry, the telecom department and the cabinet secretariat,” said one of the persons aware of the details.

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The government is working to announce the measure—the second such substantial relief package for the debt-laden sector since September 2021—in the February 1 budget, said the people cited. This comes on the heels of last month’s relief measure—waiving the requirement for submitting bank guarantees for past spectrum dues, a move that benefitted Vi the most. It will no longer need to submit guarantees worth Rs 24,800 crore, opening up space for lenders to extend debt to the carrier.

The move to provide another relief package underlines the government’s intent of ensuring a competitive sector with three healthy private players, along with state-run Bharat Sanchar Nigam Ltd (BSNL).

The telecom industry, which had been reeling financially due to cutthroat competition since the entry of Reliance Jio in 2016, suffered a body blow when the Supreme Court in October 2019 backed the government’s view and levied Rs 1.47 lakh crore of AGR dues. This comprised Rs 92,642 crore of license fees and spectrum usage charges (SUC) of Rs 55,054 crore. Nearly 75% of the dues consisted of interest, penalties and interest on penalties.

The last legal move by telcos to challenge the verdict—or some aspects of it—was exhausted when the top court in September 2024 rejected a curative petition seeking a re-computation of the AGR dues. At that time, VI’s AGR dues stood at Rs 70,300 crore while that of Airtel amounted to Rs 36,000 crore.

These dues have since increased due to constant accrual of interest, penalties and interest on penalties. As per industry estimates, the latest AGR dues till March 2025 for Vi could be Rs 80,000-85,000 crore; Rs 42,000-44,000 crore for Bharti; and Rs 17,000- 19,000 crore for Tata Teleservices.

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