DoT to complete reassessment of Vodafone Idea AGR dues by February-End

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The reassessment exercise by DoT comes after the Supreme Court rulings in October and November allowed the government to reassess and recalculate the AGR dues of the company. Following the Supreme Court order, the government froze the AGR dues at ₹87,695 crore as of December-end.

The telecom department has already started the reassessment of the AGR dues of the cash-strapped telecom operator from FY07 to FY19.(REUTERS)

After freezing Vodafone Idea’s adjusted gross revenue (AGR) dues at ₹87,695 crore, the Department of Telecommunications (DoT) aims to complete the reassessment of the amount by the end of February, it informed its field units and the company in a 15 January letter.

The telecom department has already started the reassessment of the AGR dues of the cash-strapped telecom operator from FY07 to FY19. In a seven-week exercise, the DoT along with the Controller of Communication Accounts (CCAs) will reassess the licence fee and spectrum usage charges that have been paid based on AGR by the telecom operator for the period under review.

CCAs are DoT’s regional offices that handle financial checks, payments, and verification of telecom operators’ dues.

In the letter seen by Mint, the DoT said that the targeted timeline to complete the reassessment by 27 February depends on Vodafone Idea’s timely response and submission of the required documents.

After SC ruling

The reassessment exercise by DoT came after the Supreme Court rulings in October and November had allowed the government to reassess and recalculate the AGR dues of the company. Following the Supreme Court order, the Union Cabinet on 31 December took the decision to provide a breather to the telecom operator, which involved freezing its ₹87,695 crore AGR as of December-end.

The government had approved the payment plan for the company to clear its frozen AGR dues between FY32 and FY41.

“As per the decision of the competent authority, the AGR dues of Vodafone Idea Limited (VIL) for the period FY 2006-07 to FY 2018-19 (excluding those dues of FY2017-18 and FY2018-19 which stand finalised by the Supreme Court dated 1 September 2020) shall be reassessed for all deductions disallowed by DoT by applying Deduction Verification guidelines of 3 February 2020 and applying the audit reports not so for acted upon,” the DoT said in the letter.

Based on the reassessment exercise, the final AGR dues of the company could reduce, officials in the know said, requesting anonymity.

Shares of Vodafone Idea on Friday ended 2.5% lower at ₹10.8 apiece on the National Stock Exchange.

After the AGR dues freeze, the telecom company’s total outgo towards AGR payments over the next six years from March 2026 to March 2031 would be at ₹744 crore, a maximum of ₹124 crore per year. It will also have to pay ₹100 crore annually over four years, from March 2032 to March 2035.

“The remaining AGR dues have to be paid in equal instalments annually over 6 years, i.e. March 2036 to March 2041,” Vodafone Idea had said in an exchange filing on 9 January.

Deduction verification guidelines are rules used by the DoT to check and approve revenue exclusions before finalising AGR dues.

Breather from pressure

With the freeze on its AGR dues, the telecom operator has got a breather from a significant financial pressure which would have come from March onwards with annual installments of about ₹18,000 crore in the absence of such relief. The telecom operator had previously warned that it won’t survive FY27 without raising funds, and banks are hesitant to lend without a generous bailout or clarity on the AGR dues.

Even as the company got a breather on the timeline to pay AGR dues, the concerns remain over its spectrum dues of ₹1.17 trillion and clarity on final AGR amount post reassessment, analysts said.

“While the relief package addresses AGR dues, Vi (Vodafone Idea) also has ₹1.2 trillion of deferred payment obligations toward spectrum, with significant scheduled payments between FY26 and FY44. The current Ebitda is insufficient to meet the capital expenditure (capex) or spectrum debt repayment requirements. The company will need additional relief/funding to alleviate such challenges,” brokerage Emkay Global said in a note dated 1 January.

The government owns nearly 49% stake in Vodafone Idea after converting nearly ₹53,083 crore of dues into equity in two tranches in February 2023 and April 2025.

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