The government is considering a significant relief package for the telecom sector, including a 50 per cent waiver on interest and a complete 100 per cent waiver on penalties related to adjusted gross revenue (AGR) dues.
The government may announce the relief package in the Union Budget for 2025-26.
This potential relief, long demanded by the industry, could provide much needed breathing space to cash-strapped operators such as Vodafone Idea and Bharti Airtel, whose combined liabilities exceed ₹1.2 lakh crore.
This move aims to ease the financial stress on the sector while ensuring a sustainable payment structure for outstanding amounts.
Vodafone Idea and Bharti Airtel owe ₹80,000 crore and ₹42,000 crore, respectively, in AGR dues.
More than half of these amounts stem from penalties and interest on the original dues, which arose after a 2019 Supreme Court ruling upheld the Department of Telecommunications’ (DoT) definition of AGR.
The AGR issue has seen a long standing legal battle. After the 2019 verdict, telecom companies sought recomputation of the dues, filing review petitions and curative pleas. These were rejected by the Supreme Court in 2020, 2021 and as recently as September 2024.
So far, the relief for telecom operators has been limited to payment moratoriums and staggered repayment schedules. Annual payments are set to begin in 2026, following a moratorium period that ends in 2025. The net present value (NPV) of the dues remains unchanged per Supreme Court directives.
The telecom sector has witnessed a revenue upswing. Gross revenue rose 10.5 per cent year-on-year to ₹91,426 crore in the July–September 2024 quarter, according to the Telecom Regulatory Authority of India.
Adjusted gross revenue (AGR) increased 13.11 per cent to ₹75,310 crore during the same period.
Bharti Airtel’s AGR surged 24.15 per cent to ₹24,632.84 crore, while Reliance Jio posted a 14.19 per cent rise in AGR to ₹27,652.68 crore. Vodafone Idea’s AGR saw a modest 4.39 per cent increase to ₹7,836.98 crore, reflecting its ongoing struggles.
Despite tariff hikes of 11–25 per cent by major operators in July 2024, subscriber losses persisted. However, average revenue per user (ARPU) climbed 9.6 per cent to ₹172.57 in the September quarter, indicating improved profitability per customer.
