Voda-Idea Agr Cut To ₹64,046 Cr; Pay Plan Set | DoT Finalises; Relief On Dues | India Tonight

Added: 2026-05-07

[00:00:00]Major relief for the financially you know strained telco after this reassessment And three important points I'll tell you. First and foremost you saw the absolute reduction of around 23,000 crore. And not only that the company was supposed to pay from FY 26 meaning where we are sitting right now. So that is gone for 5 years and more importantly till FY 36 you have a very little payment of 100 crore and they have got instead of 10 years 15 years to pay this 63,000 crore. Right. Now to discuss this we are now joined in by Satya N. Gupta who's the ex-principal advisor at TRAI along with Piyush Pandey senior vice president IT lead analyst at Centrum.

[00:00:48]Gentlemen, thank you so much for joining us on India tonight. Now a 27% haircut is what we are seeing reduction from 87,695 crore rupees to 64,046 crore is massive. You know, what is it?

[00:01:04]Is it purely correction on accounting errors or you know, is it like sort of a policy level shift you know, in how penalties on interest are being calculated?

[00:01:17]Yeah, something actually this is correct. It is a big relief and lot of of course the as the committee was formed for the purpose they were would have been given what is called a terms of reference or mandate but in no way it can be other than the removing the correction error like O&O is permissible like they say and Supreme Court clearly mentioned that you can do the real calculation. According to me it is the basically a recalculation or re-look on all the things because earlier the Vodafone have been alleging that somewhere they have paid double, somewhere whatever they have paid was not even taken cognizance of, somewhere they were put on the on the revenue which were not actually liable for AGR payment. So all those things were there. Everything bound here were towards the errors actually. All these were errors. They were they could have been calculation error, they could have been judgment errors. So now they have been corrected.

[00:02:33]Actually according to me it is not any policy change. It is just to have a re-look on the total cycle of the payment like whatever are the dues, how much was paid, when it was paid, what is the date of payment and all that thing.

[00:02:51]So I don't think they have here dared to do any policy change actually. It is there there can be a change on the judgment on the positive side, there can be a of course a correction on the calculation side. That is what I feel. Right right point well taken Mr. Pandey. I'll want to come to you with the kind of moratorium if I would use that word has been given to Vodafone for next 5 years and 15 years have been given to the reduced amount of by 23,000 crore.

[00:03:23]Do you think it is as per the expectation of market or you think Vodafone would look for more relief?

[00:03:30]I would think it's primarily as per the street estimates.

[00:03:34]And see Vodafone was supposed to raise a fund of around 5000 crores to ramp up its capex.

[00:03:41]And that that was primarily holding up due to its delayed reassessment. So now we expect that this relief will help help us help it to close its uh uh coming capex program and maybe ramp up its 4G and 5G networks to catch up peers like Bharti Airtel and Reliance Jio. So I would say welcome relief.

[00:03:59]And it will help us help it to like say close its upcoming capex.

[00:04:05]Sir, since you mentioned Bharti Airtel and Jio is it sufficient to bridge the gap you know, considering that they have aggressively expanded specially with 5G rollout and all over the past couple of years across many markets in the country? Is the AGR relief sufficient enough?

[00:04:23]See I would say government wants to maintain a three a three plus one structure.

[00:04:27]Uh so with Jio and Bharti Airtel there was a risk of getting into duopoly.

[00:04:33]Now with Vodafone getting this relief we expect that uh Vodafone uh would would be able to ramp up its capex and would start gaining some customers.

[00:04:43]So in a way at least the aim is to at least to provide customers with some choice uh regarding telecom services. And if you go by TRAI data Vodafone was able to add uh few number of customers in the month of March and February.

[00:04:59]I would say very welcome relief and now it depends on like say how they close their uh fund raise.

[00:05:05]Definitely Mr. Gupta I want to understand from you now that the relief has come on Vodafone what happens to other telecom companies? They were also reaching out to government to court regarding the relief in AGR calculation.

[00:05:17]Do you think it will open the window further?

[00:05:21]Yes yes that is correct actually though the Supreme Court order was dedicated or singling out Vodafone only it was very clear. DOT also did it for that but under the natural justice under the level playing field means other companies also will have to be actually given this chance. Their actually you can say dues or the liabilities will also will have to be recalculated.

[00:05:50]Whether court have told that court have not told that you don't do it for others actually. They have done it you do at least for Vodafone that they have done.

[00:05:59]Now court will not prevent government or stop government to have a re-look on the other similar of players also. That is a natural justice actually. The government will not be able to shirk from their duty of having re-look because it is a case where there is a calculation error appears to be a calculation error by the department who is also looking at or calculating for these other two players who are left out. So if calculation error has happened in one case by a particular agency or a particular individual or a department it is 100% sure that the same kind of error would have happened in the other cases also.

[00:06:46]So under the natural justice principle government suo moto according to me should do a re-look before the other party goes to court and get a order from the court to the government to do the recalculation. That is what you are saying. Opening of Pandora's box.

[00:07:04]It's like opening of Pandora's box Mr. Gupta is what you are saying with other players also asking for a similar relief but you know, having said that Mr. Pandey I want to come to you. In 2025 Vodafone had in fact said that they wouldn't be able to operate beyond FI 2020 FI 26 without a relief. So you know, this announcement that has you know, come in today is it like a probably like a permanent relief for like a threat to insolvency or you know, like probably it has been postponed to the next decade according to you?

[00:07:44]See if Vodafone had gone down it would have reduced the sector to a sort of duopoly. Hm. Just two players like say Bharti Airtel and Reliance Jio. And in in any case I think it's part of the policy of government uh to prevent duopoly in key sectors like say telecom.

[00:08:00]So in any way I would say the street was expecting that whatever relief was required would be provided to Vodafone Idea uh so that it at least stays operational.

[00:08:09]And uh uh there has been I would say some improvement in operational parameters.

[00:08:14]And uh now it depends on like say whether they are they are able to reduce the customer churn with which they have uh uh which has been ongoing for the last several years. So if they are able to reduce the customer churn and if they increase their customer output then uh things can materially improve for Vodafone Idea.

[00:08:34]And Mr. Pandey if we understand the order correctly 500 crore is the ask for next 10 years that too for next 5 years you don't need to pay anything. In that scenario do you think that Vodafone will get some of the lenders which it was seeking for very long? Will this recalculation help?

[00:08:54]Of course of course. Uh as per the recent developments they were planning to raise some 25,000 crores of debt.

[00:09:02]So now I think like now with this clarity on AGR dues payment and with some improvement in their customer addition over the last 2 months I think it should be reasonably slightly more easier to uh close their debt fund raise.

[00:09:18]Uh because see the current cash generation is hardly around 10,000 crores per annum.

[00:09:23]And they need to significantly uh increase their capex to around 50,000 crores over the next 3 years. So in the absence of fund raise it would be difficult to undertake that capex program.

[00:09:34]And so anyway so we believe that it will definitely help to close that debt fund raise.

[00:09:41]Mr. Gupta I want to ask you because government is also a stakeholder in Vodafone and therefore do you think there will be multiple options and not just of course debt raising is one of the options but operational efficiency is something which company will have to look beyond a point because if you have to pay even this amount in next 15 years, you need operational sustainability and you need to thrive on that.

[00:10:07]Yes, yes, correct. Actually, that is there as you know, whatever they ask, it it everything cannot be given and whatever is given, it can never be sufficient. That is one thing here. Government has been intervening for last 3 years to protect them whatever way they can do. Now, this is one way they have done. It basically helps mainly in reducing their liability first and also improving their cash flow. But yes, operational efficiency is what unfortunately, actually the government say I will not intervene in the operational you can say of Vodafone operations of Vodafone. They have not posted a director on the board which they should do as a as a largest stakeholder, how they can away from not being there in the board actually. That is one thing minimum required and in name of this that they say we don't want to intervene, we want to give them full freedom. So, if you give them full freedom, then they they should also do operationalization let us say efficiency, productivity.

[00:11:15]There are so many things which can do actually if they themselves are not doing, government should force at the largest stakeholder. Actually, there is a concept called in with everyone is doing it only and this type of is Mr. Gupta, Mr. Gupta, just one thing just one thing I want to understand here. Do you think that in next 15 years the government will stay as stakeholders?

[00:11:36]Because if they are not involved in the operational things, then they will look to sell their stake, right?

[00:11:43]No, how they will sell the stake?

[00:11:44]Actually, there are no taker in fact of their stake. Yes, they will sell but today they are at the stake. They have put public money in the company and now they say we don't want to tell anything to them actually. They should do that and stakeholder according to me, they are married for life with them.

[00:12:04]>> [laughter] >> Very very well put Mr. Gupta. Mr. Pandey, one last thing before we let you go.

[00:12:12]How do you think the stock will perform now after the relief has been given to Vodafone or you think it was already discounted?

[00:12:21]I would think it was mostly discounted like so it it was expecting some sort of relief on this reassessment.

[00:12:26]But having said that, I think the next trigger will be like say if if they can improve their customer addition or like say if they're able to raise a fund in say one or two months time frame. That can be the key trigger.

[00:12:40]Mr. Pandey and Mr. Gupta, thank you so much for joining us tonight on ET Now on India Tonight to discuss you know, this major relief that has come in from for Vodafone Idea.