Level-playing field: Support to Vodafone Idea should not be exclusive

The five-year AGR moratorium gives Vodafone Idea crucial breathing space, but raises questions on fair competition and a level playing field in India's telecom sector

The five-year moratorium that Vodafone Idea (Vi) has secured for paying its adjusted gross revenue (AGR) dues to the government is a substantial relief for the financially stressed telecom operator. The lifeline, which will let Vi pay the AGR dues of ₹87,695 crore from 2031-32 to 2040-41 instead of from March 2026, is expected to enable the telecom operator to set its house in order by raising funds, strengthening its business, and arresting subscriber erosion in the meantime. The Union Cabinet’s latest approval to freeze Vi’s AGR dues for five years is also a government step in the direction of preventing a duopoly situation in the telecom sector. This comes at a time when a near duopoly in the aviation sector has come into focus after the recent chaos triggered by IndiGo’s flight cancellations over new norms on pilot rest. In a bid to reverse the duopoly character in Indian aviation, the government has even granted no-objection certificates to a string of companies seeking to start airlines. 

However, it’s important to note that preventing a duopoly should not go against the principle of a level playing field in any sector. It’s no different in the case of telecom, which was until a few years ago a sector with multiple operators, and then the alleged 2G scam forced several telcos out of business. So, if Vi, in which the government has a 49 per cent stake, has been granted a moratorium to repay its AGR dues up to 2016-17, another private telco, Bharti Airtel, too deserves similar support even though its financials are much stronger. Reliance Jio, the third private telco, started its operations only in 2016 and, therefore, has no pending AGR dues. 

To put things in context, AGR dues are to be paid to the government by all telcos, including state-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), as part of licence fees and spectrum-usage charges. As against the past model of companies paying a fixed fee for the telecom licence, a revenue-sharing format was introduced in 1999, where telcos were mandated to share a fixed percentage of their gross revenue with the government as licence fee and spectrum-usage charge. But the definition of AGR (whether the entire revenues of the company or only the telecom revenue will be counted for paying the dues) has been a point of contention, sending the stakeholders to courts over the years. The latest Supreme Court verdict of October 2025, which was modified a bit a month later, forms the background of the Union Cabinet decision on the five-year moratorium, given on December 31. The court allowed the Union government to reassess and reconcile Vi’s AGR dues up to 2016-17. 

This is not the first time that Vi has got a lifeline from the government. Earlier, the telco, which had a debt pileup, was a beneficiary of a relief package for the telecom sector. The government converted Vi’s dues, in tranches, into its own equity. Anything beyond this will make the government a majority shareholder in the company. The moratorium is likely to lend a certain degree of predictability and stability to Vi’s financial and business scenario while the government reassesses the amount of the dues, as permitted by the Supreme Court. Since the court has not debarred the authorities from extending a moratorium or relief to other telcos, the government must explore that possibility to ensure equity in dealing with businesses.