Govt Weighs Lifeline for Vodafone Idea on ₹84,000 Cr Dues; Scindia Says Duopoly ‘Not Good Enough’

NEW DELHI: The Indian government is actively considering a significant relief package for the debt-laden telecom giant Vodafone Idea (Vi) to save it from a potential collapse, according to media reports on Tuesday. The news of a potential bailout for the struggling telco, which faces outstanding dues of around ₹84,000 crore, sent its shares soaring by over 6% in early trade.

The move comes after Vodafone Idea reportedly informed the Centre that it might not be able to continue operations beyond FY26 without government support and may have to file for bankruptcy. The government, which is the largest shareholder in Vi with a 49% stake, is keen to prevent a market duopoly of Reliance Jio and Bharti Airtel.

Relief Measures Under Consideration

To provide a much-needed lifeline to the company, the government is reportedly evaluating several proposals, including:

• Extending Repayment Period: The tenure for repaying the Adjusted Gross Revenue (AGR) dues could be extended from the current six years to 20 years.
• Interest Rate Relief: The government may shift from charging compound interest to simple interest on the outstanding dues.
• Nominal Annual Payments: Allowing Vi to pay a nominal amount of ₹1,000–₹1,500 crore annually until a broader resolution is reached on its liabilities.

Averting a Duopoly

The government’s intervention is bolstered by recent statements from Union Telecom Minister Jyotiraditya Scindia, who emphasized the need for a competitive telecom sector. “It’s not good enough having a duopoly or one carrier or two carriers. India must have competition in every sector,” Scindia stated, making it clear that ensuring the survival of a third private player is a strategic priority.

The urgency for a relief package is heightened by Vi’s looming payment obligations. The company’s four-year payment moratorium ends in September 2025. Following this, it is scheduled to pay ₹12,000 crore to the government by March 2026, and a staggering ₹43,000 crore annually for five years from FY27 to FY31—payments that are unfeasible in its current financial state.