New Delhi: Vodafone Idea Limited (Vi) has submitted a proposal to the Indian government, seeking a recalculation of its Adjusted Gross Revenue (AGR) dues. The telecom operator aims to remove arithmetical errors and duplications in the calculation. Vi also requested a one-time waiver of penalties and interest on penalties, which could reduce its total liability by an estimated ₹45,000 to ₹50,000 crore. This move follows a recent Supreme Court clarification allowing the government to review and re-evaluate the company's pending AGR liabilities.[telecomtalk+1]
Understanding the AGR Challenge
Adjusted Gross Revenue (AGR) represents the usage and licensing fees that telecom operators must pay to the Department of Telecommunications (DoT). The dispute over AGR began years ago, centering on what revenues should be included in its calculation. DoT maintained that AGR should include all revenues, even from non-telecom sources like interest income and asset sales. Telecom companies, however, argued that only revenue from core telecom services should count.[civilsdaily+5]
In October 2019, the Supreme Court upheld DoT's broader definition, significantly increasing the financial liabilities for telecom operators like Vodafone Idea. This ruling forced companies to pay outstanding dues based on the wider definition. Later, as part of the 2021 Telecom Relief Package, the government changed the definition of AGR to exclude non-telecom revenue for future calculations, providing some prospective relief.[civilsdaily+3]
Vodafone Idea's Mounting Financial Strain
Vodafone Idea faces immense financial pressure, with total AGR liabilities standing at over ₹83,500 crore as of March 2025. Its overall debt, including spectrum dues, is around ₹2.02 lakh crore, and the company reported a negative net worth of ₹82,460 crore as of September 2025. The burden of these dues severely impacts Vi's ability to invest in network upgrades, including the crucial rollout of 5G services.[telecomtalk+6]
The company has been steadily losing subscribers, with its mobile user base dipping to 20.07 crore in October 2025. Vi has warned that it might not be able to continue operations beyond the financial year 2026 without immediate financial support and relief on its AGR liabilities. This dire situation underscores the critical importance of the current proposal to the government.[telecomtalk+6]
Government and Supreme Court Intervention
The Supreme Court provided a crucial clarification in October and November 2025. It stated that the government is free to reconsider and recalculate all of Vodafone Idea's Adjusted Gross Revenue dues, including interest and penalties. This clarification resolved earlier ambiguities about whether relief applied only to specific additional dues or to the entire outstanding amount.[ndtvprofit+4]
Previously, in May 2025, the Supreme Court had dismissed petitions from telecom operators, including Vi, seeking a waiver on interest and penalties. However, the more recent clarification opens the door for government intervention. The Indian government already holds a 48.99% equity stake in Vodafone Idea, having converted tens of thousands of crores of interest dues into equity. Union Telecom Minister Jyotiraditya Scindia recently indicated that the government is evaluating legal options and could announce recommendations for relief by year-end, following Vi's formal request. High-level meetings involving officials from the Finance Ministry and DoT were scheduled in December 2025 to discuss Vi's AGR dues.[m+10]
The Path Ahead for Vodafone Idea
Vodafone Idea's proposal specifically seeks the removal of arithmetical errors and duplication from its AGR calculation. It also requests a one-time waiver of penalties and interest on penalties, which could significantly reduce its payable amount. Such a reduction of ₹45,000 to ₹50,000 crore is vital for the company.[telecomtalk+3]
This potentialrelief is seen as crucial for Vodafone Idea to secure its planned ₹25,000 crore fundraising efforts. It would also allow the company to invest in modernizing its network and rolling out 5G services, enabling it to compete more effectively in the Indian telecom market. The government's decision on this proposal will be critical for Vodafone Idea's long-term sustainability and the competitive balance of the country's telecom sector.[telecomtalk+6]
