Vodafone Idea shares have surged more than 10% in just two days on hopes of possible AGR relief measures from the government. The development comes as the troubled telecom operator awaits a crucial decision on whether additional relief will be granted.
Government Relief Decision Pending
Minister of State for Communications Chandra Sekhar Pemmasani told Mint on Monday that a final decision on providing relief to Vodafone Idea will be taken after discussions with Prime Minister Narendra Modi, the Union Cabinet, and the Finance Ministry.
He added that since the amount involved is substantial, any decision will be collective in nature.
“At this time, there is nothing that we have planned (on providing relief),” the minister clarified, highlighting that the government had already converted a large portion of Vodafone Idea’s debt into equity.
Currently, the government owns a 49% stake in the struggling operator.
Vodafone Idea’s AGR Dues and Survival Concerns
Vodafone Idea owes around ₹83,400 crore in AGR dues to the government, with annual payments of ₹18,000 crore scheduled to begin from March next year.
In total, the company owes close to ₹2 trillion, including penalties and interest. The telecom operator has already warned that without additional funding, it may not survive beyond the current financial year, as banks remain reluctant to extend more loans given its high debt burden.
Last month, the Department of Telecommunications (DoT) had reportedly proposed multiple relief options to the Prime Minister’s Office (PMO), including:
- A two-year extension on AGR dues under moratorium.
- Smaller annual payouts.
- A waiver on penalties and interest on adjusted gross revenue payments.
The PMO will take the final call on these proposals.
AGM and Leadership Update
Vodafone Idea also conducted its 30th Annual General Meeting (AGM) on Monday. In an exchange filing, the company revealed that Kumar Mangalam Birla, Chairman of the Aditya Birla Group, could not attend the meeting due to preoccupation.
Satellite Internet Spectrum Debate
On the sidelines, the Minister also discussed the growing satellite internet sector in India. He stated that spectrum pricing for companies like OneWeb, Starlink, and Jio Satellite was under review.
While TRAI has recommended a 4% AGR spectrum charge, the government is yet to take a final decision. Pemmasani clarified that current satellite gateway licences apply only within India and won’t allow services for overseas markets.
BSNL as the Third Strong Player
Currently, the Indian telecom market is dominated by Reliance Jio and Bharti Airtel, who hold about 75% of the subscriber market share. Pemmasani emphasized that BSNL could emerge as a strong third competitor.
- The government has already announced a ₹47,000 crore capex to support BSNL’s 4G rollout.
- So far, BSNL has installed 100,000 4G towers using indigenous telecom technology.
- The company will soon expand with additional towers to prepare for 5G services.
The minister noted that 85-90% of BSNL towers are working efficiently, stressing the importance of self-reliant telecom infrastructure amid global geopolitical risks.
Tariffs and Inclusivity
When asked about the recent discontinuation of entry-level ₹249 plans by Jio and Airtel, Pemmasani said private players have invested heavily in 5G and it is part of their business model. However, he assured that the government will continue to support affordable telecom connectivity through BSNL, ensuring inclusivity for all citizens.
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