DoT freezes Vodafone Idea's AGR dues; telco to pay ₹124 crore annually over 6 years

New Delhi: In a relief to Vodafone Idea, the department of telecommunications (DoT) has frozen the stressed telecom company’s adjusted gross revenue (AGR) dues, including the principal, interest and penalties, as of December end.

Based on the freeze, the telecom company’s annual outgo towards AGR payments over the next six years from March 2026 to March 2031 would be at ₹744 crore, a maximum of ₹124 crore per year.

The company's AGR dues for the period FY06-07 to FY18-19 stood at ₹87,695 crore, as of 31 December.

In an exchange filing on Friday, Vodafone Idea said it will also have to pay ₹100 crore annually over four years, from March 2032 to March 2035. “The remaining AGR dues have to be paid in equal instalments annually over 6 years, i.e. March 2036 to March 2041,” the company said.

Shares of Vodafone Idea rose over 8% to ₹12.4 on the National Stock Exchange in early trade following the news. The stock, however, pared those gain to close 1.74% down at ₹11.30.

AGR lifeline

The communication from Vodafone Idea comes after the Cabinet on 31 December took the decision to provide a breather to the telecom operator, which involved freezing its ₹87,695 AGR as of December end. The government had approved the payment plan for the company to clear its frozen AGR dues between FY32 and FY41.

“A committee is to be constituted by DoT to reassess the AGR dues, whose decision shall be final. Thereafter, the reassessed amount is to be repaid between March’ 2036 to March’ 2041 in equal annual installments,” Vodafone Idea said.

AGR is the revenue base used to calculate licence fees and spectrum usage charges payable to the government.

Over the next few months, the DoT will undertake a detailed reassessment of the ₹87,695 crore AGR dues of the company, includes interest on dues and penalties over the years.

The reassessment process to arrive at Vodafone Idea’s final AGR liability is expected to take four to five months, Mint reported on 1 January citing officials in the know.

The exercise will involve reassessment at each local circle level, going through the history of the subsidiaries linked to Vodafone Idea before the merger and the licences it had secured, a government official said, adding that the final amount is expected to reduce.

The DoT will also seek detailed, circle- and year-wise information from Vodafone Idea to address discrepancies in the dues. A government committee will decide the final outcome of the AGR reassessment exercise and that will be binding on both the government and the company.

Even as the company got a breather on the timeline to pay AGR dues, but the concerns remain over its spectrum dues of ₹1.17 trillion and clarity on final AGR amount post reassessment, analysts said.

The government owns nearly 49% stake in Vodafone Idea after converting nearly ₹53,083 crore of dues into equity in two tranches in February 2023 and April 2025. Of the roughly ₹2 trillion in total government dues, about ₹1.17 trillion relates to spectrum payments rather than AGR.

In a note dated 1 January, brokerage house Emkay Global maintained a ‘sell’ rating on the stock with a target price of ₹6.

“Contrary to the street's expectations of at least a 50% waiver, no waiver on the pending dues linked to AGR was provided by the cabinet,” the brokerage house said in the note.

“While the relief package addresses AGR dues, Vi (Vodafone Idea) also has ₹1.2 trillion of deferred payment obligations toward spectrum, with significant scheduled payments between FY26 and FY44. The current Ebitda is insufficient to meet the capital expenditure (capex) or spectrum debt repayment requirements. The company will need additional relief/funding to alleviate such challenges,” Emkay Global added.

A Supreme Court ruling in October had allowed the government to reassess and recalculate the AGR dues up to FY17.