CRISIS ALERT: Vodafone Idea Warns of Possible Collapse Without Urgent Govt AGR Help

New Delhi: Vodafone Idea (Vi) has sent a stark warning to the government’s Department of Telecommunications (DoT). The telecom operator says it might not be able to keep going beyond the financial year 2025-26. This critical situation, according to Vi, is directly linked to whether they receive timely government support on their hefty Adjusted Gross Revenue (AGR) dues.

Bank Funding Stalls Amidst AGR Burden

Getting fresh cash from banks is a huge problem right now, and Vi points directly to the unresolved AGR dues as the main obstacle. Reports indicate lenders are simply wary of extending new loans because of the substantial liabilities still hanging over the company. In a letter to the DoT, Vi’s CEO, Akshaya Moondra, didn’t mince words, stressing that if the government doesn’t step in soon, the company could reach a “point of no return.” (Business standard)

Fresh Plea Before Supreme Court

Meanwhile, there’s movement on the legal front. The Supreme Court today agreed to hear a new request filed by Vodafone Idea. The company is pushing hard for a waiver on around ₹30,000 crore of its AGR dues, specifically asking for the penalty and interest amounts to be set aside. The apex court is scheduled to hear arguments on this crucial issue come May 19.

Future in Jeopardy: Impact on Subscribers and Market

Vi explicitly warned that without securing necessary bank funding, planned investments vital for improving operations would come to a grinding halt. This stagnation could potentially lead to disruptive impacts on services for its vast base of approximately 200 million subscribers. The company also underscored the potential for significant loss of value for the government’s substantial equity stake in Vodafone Idea if its operations are compromised, reiterating the importance of maintaining a competitive three-player market for the sector’s health and consumer benefit.

Vodafone Idea has put forward a proposal to the government, including a revised payment schedule and a plea for waiver on interest and penalties, as it seeks a lifeline to ensure its survival and contribute to the stability of the Indian telecom landscape.

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