India is considering a one-time settlement of its long-pending demand for billions of dollars in dues from Vodafone Idea Ltd., per MoneyControl.
This could revive the struggling telecom operator and strengthen diplomatic ties with the United Kingdom.
Officials are exploring a framework that could include a waiver of interest and penalties, followed by a partial concession on the principal amount of the nearly ₹2 trillion ($22.5 billion) in disputed dues, the people told MoneyControl, asking not to be named as the discussions are private.
Interestingly, the government is also examining ways to prevent similar legal claims from other telecom firms that owe adjusted gross revenue (AGR) dues.
Vodafone Idea, which hasn’t reported a profit since 2016, now one official said a settlement would also help attract fresh investors, secure competition in India’s telecom sector, and send a positive signal to foreign partners.
About Vodafone Idea
Vodafone Idea, born from the merger of Vodafone Group Plc’s India operations and Kumar Mangalam Birla’s Idea Cellular Ltd., is now 49% owned by the Indian government following a debt-to-equity swap earlier this year.
A government counsel recently told the Supreme Court that “some solution may be required” given that public funds are now tied up in the company.
The AGR dispute stems from how India calculates telecom revenues to determine licensing and spectrum fees. Insiders say the court might be more receptive to a settlement this time if the government shifts its stance.
However, any relief must not give Vodafone Idea an “unfair advantage” over peers such as Bharti Airtel Ltd. or the Tata Group’s telecom unit, which have also sought concessions. One option is to seek revival plans from all operators in exchange for relief.
Notably, the talks have become more urgent ahead of UK Prime Minister Keir Starmer’s visit to India this week.
The Supreme Court is scheduled to hear Vodafone’s petition on October 6.
