Vodafone Idea (Vi) issued a clarification on Wednesday (December 31st) stating that it has not received any communication from the government regarding AGR dues. Vodafone Idea issued this statement after stock exchanges (BSE and NSE) sought clarification on media reports. Previously, several media reports claimed that the Union Cabinet had approved a relief package for debt-ridden telecom company Vodafone Idea. Under this Cabinet decision, the company’s Adjusted Gross Revenue (AGR) dues of ₹87,695 crore have been frozen. This means that the company will no longer have to pay this huge amount immediately. According to sources from state-run news agencies ANI and PTI, this payment will now have to be made within a 10-year window between fiscal year 2032 and 2041. The company’s stock fell 11.5% today following the news. Following this news, the company’s stock fell 11.5% today, closing at ₹10.67. The company’s stock has gained 7% in one month and 43% in six months. In one year, it has given investors a 34% return. The company’s market cap is ₹1.17 lakh crore. Five-year moratorium granted, no immediate payment required According to reports, the Cabinet has also granted Vodafone-Idea a five-year moratorium (payment exemption). This decision has provided significant relief to the cash-strapped company. The company had been pleading with the government for more time to repay its dues. Without this relief, it would have been difficult for the company to continue its operations. Now, the company will not have to pay large installments related to AGR dues for the next few years. What is AGR? AGR (Adjusted Gross Revenue) is the portion of telecom companies’ earnings on which the government levies license fees and spectrum usage charges (SUC). The government’s decision follows the Supreme Court’s recent decision allowing the government to reconsider the calculation of AGR dues. The court had previously taken a strong stance, but the government (which is Vi’s largest shareholder) later intervened to save the company’s existence. The government told the court that Vodafone Idea’s survival was essential to maintain competition in the telecom sector and protect the interests of millions of customers. The central government is currently the largest shareholder in Vodafone Idea, holding approximately 49%. Over the past few years, the company converted its spectrum and interest dues into equity (shares), increasing the government’s stake. The company’s total debt exceeds ₹2 lakh crore, of which AGR dues and spectrum dues constitute the largest portion. The focus will be on improving the company’s network and investing. After this relief, Vodafone-Idea will now be able to focus on raising new investments and bank loans. The company’s CEO had recently said that after getting clarity on the outstanding amount, they will start the process of raising funds from banks. This money will be used mainly for launching 5G network and improving the existing 4G infrastructure. Experts believe that with this decision, the danger of a ‘duopoly’ (dominance of only Jio and Airtel) in the telecom market has been averted for the time being.
