Vodafone Idea raises survival fears, says can’t operate beyond FY26 without help

Telecom operator Vodafone Idea told the Telecom Department that without the government’s timely support on AGR, it will not be able to operate beyond FY26 as the bank funding discussions will not move forward.

The embattled telco shot off a letter to the Telecom Department on April 17, making a strong case for a lifeline, saying “no support will lead to a point of no return”.

“Without GoI’s (Government of India) timely support on AGR, VIL will not be able to operate beyond FY26 as the bank funding discussions will not move forward,” VIL CEO Akshaya Moondra wrote in a letter to the DoT secretary.

A query sent to Vodafone Idea (VIL) did not elicit a response. It is pertinent to mention that the Supreme Court on Thursday agreed to hear a fresh plea of Vodafone Idea seeking waiver of around Rs 30,000 crore adjusted gross revenue (AGR) dues.

A Bench comprising Chief Justice B R Gavai and Justice Augustine George Masih was urged by senior lawyer Mukul Rohatgi, appearing for the telecom firm, that the plea needed an urgent hearing.

The Bench is likely to hear the plea on May 19.

Vodafone Idea, in the letter, cautioned DoT that without debt disbursement from banks, the investments it planned will not take place.

“Resultantly, operational performance improvement will be stalled. More importantly, the funds raised by the company will be utilised soon and the entire capex cycle will come to a halt. In such a case, the entire fund raising done over last 12 months and investment done so far by the company, as also the equity stake of government including the recent conversion, will lose value,” VIL said.

According to Voda Idea, without government support and in case VIL is not able to pay the AGR dues, the company will have to go into a process of NCLT which would be a long-drawn process.

In such a scenario, the network as well as spectrum assets will lose value with the service being disrupted even for a short period, the telco said.

VIL said about 200 million users would be affected and will have to port out, in such a case. Timely support will primarily benefit the general public and Indian economy at large, it said.