New Delhi: Telecom operator Vodafone Idea Ltd. has issued a dire warning to the government, stating that without urgent state intervention, it will be forced to approach the National Company Law Tribunal (NCLT) for insolvency proceedings and may not be able to continue operations beyond the financial year 2025–26.
According to reports, in a formal communication to the government, the company cautioned that the value of the government’s equity, now at 49 per cent following the conversion of spectrum dues into shares, could plummet to zero without timely support.
This would also mean that there would be no recovery of the Rs 1.18 lakh crore still pending in spectrum dues.
Despite a Rs 26,000 crore equity infusion by promoters and the government’s entry as the single largest shareholder, Vodafone Idea said it has been unable to secure bank funding.
The telecom operator stressed that without government backing, no further financial support from banks will be forthcoming.
The telecom firm, which currently serves over 200 million subscribers, highlighted the broader economic risk of a potential shutdown, warning that service disruption could have a ripple effect across sectors and adversely affect India’s digital progress.
Even after the equity conversion, the company still owes the Centre a staggering Rs 1.95 lakh crore in adjusted gross revenue (AGR) and spectrum liabilities.
It has now approached the Supreme Court, seeking a waiver of over Rs 30,000 crore from its AGR dues, specifically the penalties and interest on those penalties, citing constraints imposed by the earlier AGR verdict, which it argues limits the government’s capacity to offer relief.
As the largest shareholder, the government is effectively a partner in the business, the telco said, adding that the telecom sector could face structural collapse without additional policy and financial support.
Vodafone Idea has requested an urgent hearing in the Supreme Court on 19 May to consider its fresh plea for relief.
Discussion about this post