In a major relief to the debt-laden Vodafone Idea, the government has cut its adjusted gross revenue (AGR) dues by about Rs 23,600 crore, or nearly 27%, to Rs 64,046 crore as of December 31, 2025, following a reassessment by a department of telecommunications (DoT)-appointed committee.

In a regulatory filing on Thursday, the company said the DoT had communicated that the committee tasked with reviewing AGR liabilities has finalised the recomputed dues at the lower figure, down from the earlier frozen amount of Rs 87,695 crore.

FE was the first to report in its March 6 edition that the committee reviewing the AGR had broadly worked out a reduction of over Rs 20,000 crore from the company’s liabilities.

Back-loaded payout plan over FY32–FY41

The revised payment schedule is back-loaded. The company will pay a minimum of Rs 100 crore annually over four years from FY32 to FY35, with the balance to be cleared in six equal installments between FY36 and FY41, which will be Rs 10,608 crore annually.

The AGR dues for FY18 and FY19, which were finalised following a September 2020 Supreme Court order, will not be reopened. This amount stands at Rs 124 crore and will be paid annually over the next six years, that is between March FY26 and March FY31 without any change.

These payments would be over and above the yearly auction-related spectrum installments which the company will have to pay. Vodafone Idea has spectrum dues of Rs 1.25 lakh crore as of December 31, 2025. It faces auction related spectrum payment obligations of about Rs 49,000 crore over the next three years. The installment would be approximately Rs 7,000 crore in the first year, Rs 15,000 crore in the second and around Rs 27,000 crore in the third.

The AGR reassessment follows a fresh relief package cleared by the Union Cabinet in December 2025, which froze Vodafone Idea’s AGR dues at Rs 87,695 crore as of end-December 2025, granted a five-year interest-free moratorium on payments, and allowed a review of the capped statutory charge. The move was aimed at protecting the government’s financial interest as it holds about 48.9% equity in the company, while ensuring orderly recovery of dues, maintaining competition in a highly concentrated telecom market, and safeguarding services for roughly 198 million subscribers.

The Cabinet decision came after the Supreme Court permitted the government to reconsider additional AGR demands for periods up to FY17 and undertake a comprehensive reassessment and reconciliation of all dues, including interest and penalties.

Vodafone Idea’s liabilities had surged after a 2019 Supreme Court ruling upheld the government’s definition of AGR, triggering large retrospective demands along with interest and penalties. The judgement had fixed the dues as calculated by the DoT, which in the case of Vodafone Idea stood at Rs 53,039 crore. This amount comprised both licence fee and spectrum usage charge components and included the principal amount along with interest, penalty and interest on penalty.

Within the original calculation, licence fee dues were estimated at around Rs 29,000 crore while SUC dues were about Rs 24,000 crore, taking the total to roughly Rs 53,039 crore.

AGR dues recalculated, dispute over amount persists

Over time, the payable amount rose significantly. After the government allowed a moratorium on payments and later converted a portion of the dues into equity as part of telecom relief measures, Vodafone Idea’s AGR liability was recalculated at Rs 87,695 crore and frozen at that level in December 2025.

Vodafone Idea had earlier disputed the government’s computation, stating that the calculations contained arithmetical errors. The company had said its own self-assessment put AGR dues at around Rs 21,500 crore, substantially lower than the government’s figure.

The reduction in liabilities and deferment of payments beyond FY31 are expected to ease near-term cash flow pressures on Vodafone Idea, which has been grappling with high debt and subscriber losses. The recalibration of dues also aligns with the government’s broader objective of sustaining a three-player telecom market, seen as critical for pricing stability and investment in networks.

The relief would help the company to expedite the much needed funding. To support the capex plan of Rs 45,000 crore over the next three years, Vodafone Idea is looking to raise Rs 25,000 crore in bank funding and Rs 10,000 crore in non-funded facilities.

On Thursday, shares of Vodafone Idea closed 1.07% lower at Rs 10.18 on NSE.