Calling card: Vodafone Idea proposal to govt seeks recalculation of AGR

Telecom firm's proposal to DoT aims to halve dues, enabling ₹25,000 cr fundraising for 5G rollout and government stake dilution

Vodafone Idea (Vi) is learnt to have shared a proposal with the department of telecommunications (DoT) seeking recalculation of the adjusted gross revenue (AGR) by removal of arithmetical errors and duplication in computation of the dues besides a one-time waiver of penalties and interest on penalties, totalling to ₹45,000-50,000 crore. 

“The recalculation of dues by removing errors and omitting duplications could reduce the liability by nearly half, which would mean that the interest would then become serviceable by the company’s own finances,” said one of the sources. “This will enable Vi to raise funding from banking as well as non-banking finance avenues,” the source added. The company’s planned ₹25,000 crore funding exercise is integral to the company’s ₹50,000-55,000 crore capex plan for launching 5G services required for the company to remain competitive. 

“Exercise of recalculation of AGR at the circle levels has already begun,” a se­c­o­nd source said, asking not to be identified. 

The proposal is largely in line with its submissions made to the Supreme Court in the amended petition back in September, where it had stated that it be exe­mpted from paying penalty, interest and interest on penalty on the AGR dues, on the grounds that several components of the dues were not finalised. Vi had sought for a comprehensive reassessment of its AGR dues for periods up to FY17, as well as a recalculation of liabilities. 

According to the details, up till FY17, AGR liabilities of Vodafone Idea stood at ₹58,254 crore, of which the principal amount was ₹12,797 crore, interest was ₹28,294 crore, penalty was ₹6,012 crore and interest on penalty was ₹11,151 crore. The total liability amount has ballooned to ₹83,400 crore, as of March 2025 which was stated in the petition filed by the company in October this year. At that time, the total liability also included the additional demands of ₹9,450 crore in licence fees raised by the DoT up till FY19 of which ₹5,606 crore were up till FY17. 

Recalculation of the AGR dues would mean a change in the payment amount that Vi would have to make to the government as its first installment following the end period of the moratorium it opted for under the government’s 2021 relief package for the telecom sector. 

The timing of the relief by the government is critical since it has to pay ₹16,428 crore as AGR instalment by March 2026, “subject to reconsideration or reassessment of AGR dues including interest and penalty up to FY17 by DoT”, as per Vodafone Idea’s September quarter results. Queries to Vodafone Idea did not elicit a response as of Sunday evening. 

A third source said that the government was examining the proposal but was yet to make a decision on the steps it intends to take. “The contours of the relief that can be provided will be arrived at before the end of the month,” the source said, asking not to be named. 

“The government ownership cannot go beyond 48.9 per cent, so whatever needs to be done will have to be done wi­thin those constraints,” the source added. 

A meeting of top officials of the dep­a­r­tments of telecom, expenditure and revenue, under the Cabinet Secretary was al­so conducted on the matter. A source said the government was ‘considering all options’. A legal view of the Su­preme Co­urt’s November 3 order was being taken, where it had permitted the government to reassess all AGR dues instead of limiting reassessment to the additional demands raised by the DoT till FY17.

 

Sector experts have said that the government’s relief package, following the Supreme Court’s decision, could unlock a fresh equity raise for Aditya Birla group-backed company, in turn enabling the government to dilute its stake below the current 49% level and further providing it the option of converting additional dues into equity.

Calling card  *  Proposal in line with firm’s petition to SC to be exempted from paying penalty, interest and interest on penalty on AGR dues

 

*  Recalculation of dues could reduce Vi’s liability by nearly half

 

*  It will help Vi to raise funding from banking as well as non-banking finance avenues

 

*  Up till FY17, AGR liabilities of Vodafone Idea stood at ₹58,254 crore