Vodafone Idea's Lifeline: Government Relief Sparks Hope for Revival

Vodafone Idea (Vi) is set to pay the Indian government Rs 1,144 crore over the next decade, with AGR dues frozen at Rs 87,695 crore. The government relief provides much-needed breathing room for the debt-laden telecom company, facilitating potential future investments in network infrastructure.

The beleaguered telecom company, Vodafone Idea, announced Friday that it will commit to paying the Indian government Rs 1,144 crore over the next decade while tackling the frozen adjusted gross revenue (AGR) dues of Rs 87,695 crore beginning March 2036. The union cabinet's decision offers a much-needed respite to the struggling operator.

Under the government's plan, Vi will clear AGR dues from the 2031-32 fiscal year through 2040-41. Additionally, Vodafone Idea has been granted six years to settle dues from 2017-18 and 2018-19, commencing in 2025-26. This measured approach addresses principal, interest, penalties, and interest on penalties for dues owed from 2006-07 to 2018-19.

Industry analysts suggest this foundational support could expedite Vi's efforts to secure a Rs 25,000 crore bank loan for network expansion, ultimately bolstering its financial standing and prospects for future equity raises. The relief, backed by government intervention and a Supreme Court ruling, marks a crucial step in Vi's ongoing struggle to remain viable.

(With inputs from agencies.)