The Cabinet secretary is expected to take a final call on a proposal for providing around Rs 90,000-crore relief package to telecom operators like Bharti Airtel and Vodafone Idea, by waiving off a significant portion of their adjusted gross revenue (AGR) dues.
Earlier, the department of telecommunications (DoT) had proposed to the finance ministry to waive 50% interest and 100% penalties and interest on penalties, on the AGR dues.
In October 2019, the Supreme Court had backed the government’s view and levied AGR dues on telecos of Rs 1.47 lakh crore. This comprised Rs 92,642 crore of licence fees and spectrum usage charge of Rs 55,054 crore. Around 75% of the dues comprised interest, penalties, and interest on penalties. So far, the telcos have paid around Rs 37,000 crore.
The government’s consideration of a significant part of AGR dues waiver comes after the SC last year rejected their curative plea seeking correction in arithmetical errors by the DoT in computing their AGR dues arising out of a 2019 order.
If AGR relief comes, Vodafone Idea and Bharti Airtel would be the key beneficiaries, besides Indus Tower. Analysts said under the proposed relief, the AGR dues for Vodafone Idea are expected to come down by Rs 52,000 crore and for Bharti Airtel by Rs 38,000 crore.
Vodafone Idea’s payment obligations to the government stood at Rs 2.27 lakh crore as of December 31, 2024, which includes deferred payment obligation towards spectrum payable over the years till FY 2044 and AGR (including interest accrued but not due) payable over the years till FY 2031. The company’s AGR liability was at Rs 77,000 crore.
For Airtel, the overall AGR dues are expected to be over Rs 40,000 crore, according to analysts estimates.
According to CLSA, in absence of AGR relief, Vodafone Idea could face financial crisis in the second half of FY26/FY27, when annual spectrum and AGR payments to the government of $4-5 billion (around Rs 40,000 crore) per annum become due.
The same because the government’s four-year moratorium on AGR payments and spectrum dues which was given in 2021, will come to an end in FY26.
The SC’s September 1, 2020, order had said that the companies were required to pay their dues over a 10-year period, after paying 10% of their dues upfront by March 31, 2021. Thereafter, the deferred payment cycle would run till 2031 with the 10% amount to be paid by March 31 every year.
Later, the government offered a four year moratorium on this, which comes to an end in October, 2025. Of their total dues, Bharti has already paid Rs 18,000 crore, while Vodafone Idea has paid Rs 8,000 crore.
