Vodafone Idea in Talks with Government for AGR Relief, Confirms CEO

Vodafone Idea’s Chief Executive Officer, Akshaya Moondra, has confirmed that the telecom operator is actively engaging with the Government of India to seek relief over its Adjusted Gross Revenue (AGR) dues. The development follows a recent investor call post the company’s Q4 and FY25 financial results, where Moondra highlighted both regulatory and structural challenges facing the telecom sector.

Ongoing Discussions With the Government

Addressing investors, Moondra reiterated Vodafone Idea’s commitment to working with the government for potential relief on the AGR front. “As far as the government relief is concerned, we are engaged with the government… what the government will do, I cannot comment on their behalf,” he said.

The statement comes on the heels of the Supreme Court’s rejection of Vodafone Idea’s plea for AGR relief. The company is seeking a waiver of approximately Rs 30,000 crore in dues, a critical lifeline that could determine its long-term viability. Moondra stressed that without government intervention, operations beyond FY26 may become unsustainable, as already communicated to the Department of Telecommunications (DoT).

Sector-Wide Challenges: Low ARPU and Unsustainable Pricing

One of the key concerns flagged by Moondra is the low Average Revenue Per User (ARPU) in India, which he claimed is among the lowest globally. He noted that current pricing models are inadequate to recover the cost of capital, further worsening the financial health of telecom operators.

Moondra argued that pricing needs a structural shift. He suggested that higher data consumption should lead to higher billing rates, unlike the current flat-pricing structure. He also referenced the 2021 telecom reforms and the Supreme Court’s clarification that policy decisions are at the discretion of the government—offering a potential precedent for new relief measures to revive the sector.

Financial Results for Q4 and FY25

Despite ongoing struggles, Vodafone Idea reported some improvement in its financial metrics for the quarter ending March 2025. The company’s net loss reduced to Rs 7,166.1 crore, and revenue rose by 3.8% YoY to Rs 11,013.5 crore.

For the full fiscal year (FY25), Vodafone Idea’s losses stood at Rs 27,383.4 crore, down from Rs 31,238.4 crore in FY24, reflecting efforts to streamline operations and reduce expenditure. However, the telecom firm remains in a fragile financial state, prompting urgent steps for fresh capital.

Fundraising Plans Approved by Board

To strengthen its financial position, Vodafone Idea’s board has approved a capital-raising plan of up to Rs 20,000 crore. The funding may be acquired through various channels, including public offerings, private placements, or a combination of both. The fund infusion is crucial to enhance infrastructure, repay existing dues, and potentially launch next-gen services like 5G.

Moondra indicated that regulatory and shareholder approvals are still pending for the plan to move forward.

Declining Subscriber Base: A Growing Concern

The company continues to lose ground in terms of its customer base. According to TRAI data, Vodafone Idea lost 6.47 lakh subscribers in April 2025, bringing its total down to 20.47 crore users. This drop adds to the operational challenges and directly affects revenue and investor confidence.

The declining subscriber count puts more pressure on the telecom operator to innovate, stabilize services, and gain competitive parity with rivals like Reliance Jio and Bharti Airtel.

Government Stake and Future Outlook

Moondra also addressed speculation surrounding the Indian government’s 49% stake in Vodafone Idea, acquired via a dues-to-equity conversion. He clarified that the government has no intention of taking a board seat, which could ease concerns regarding management interference.

With funding in motion and relief discussions underway, Vodafone Idea is attempting to rebuild investor trust, restructure debt, and reposition itself in a fast-changing telecom environment.

Conclusion

Vodafone Idea’s future hangs in a delicate balance as it negotiates with the government for AGR relief, navigates declining user numbers, and prepares for a critical fundraising phase. While recent financials show marginal improvement, long-term sustainability will depend on regulatory support, a new pricing model, and a revamped strategic direction.