By How Did It Come to This?
Vi’s troubles are rooted in a Supreme Court ruling from 2019 that widened the definition of adjusted gross revenue, including non-telecom revenues in the base used to calculate license fees and spectrum usage charges. For older telecom companies like Vodafone and Idea (which merged in 2018), this led to massive retrospective dues.
Here’s the breakdown:
- Total AGR dues: ₹83,400 crore
- Paid so far: ~₹8,000 crore
- Waiver requested: ₹45,000 crore (interest + penalties)
Despite partial payments and restructuring efforts, the remaining liability has stalled Vi’s turnaround plans and kept new investors at bay.
Government Equity: A Silent Stake at Risk
In an attempt to support the sector and prevent a duopoly, the Government of India converted ₹36,950 crore worth of Vi’s dues into equity in March 2025, acquiring a 49.1% stake in the company.
However:
- The stake is non-voting and non-controlling
- The government holds no board position or operational involvement
- The investment’s value is entirely dependent on Vi’s survival and future performance
If Vi goes under, this stake becomes financially meaningless — a ₹36,950 crore write-off for the exchequer.
Why Vi Still Can’t Raise Funds
Vi has long struggled to secure capital despite announcing fundraising plans since 2021. The company argues that the lack of AGR clarity and the enormous liabilities are scaring off investors.
Challenges include:
- Mounting debt with no final resolution
- Inability to invest in 5G infrastructure
- Shrinking customer base and ARPU (average revenue per user)
- Intense competition from Jio and Airtel
Without new funding, Vi says, it will not be able to sustain operations beyond FY25.
What Vi Is Asking From the Supreme Court
The telco has now approached the Supreme Court, seeking:
- Waiver or moratorium on interest, penalties, and interest on penalties (₹45,000 crore+)
- Permission to defer payments further
- Space to bring in strategic investors post-relief
Vi argues that unless the burden is lifted, no investor will touch the company, and the government’s equity will lose all value.
A Collapse Would Reshape the Industry
If Vi is forced to shut down, the consequences would be wide-ranging:
1. From Competition to Duopoly
India’s telecom space would effectively be split between Reliance Jio and Bharti Airtel, giving them unchecked pricing power and weakening consumer choice.
2. Mass Subscriber Migration
Vi still services around 200 million users. Migrating them would overload rival networks and create service disruptions.
3. Financial Losses Across Stakeholders
Not only would the government lose ₹36,950 crore, but banks, vendors, and bondholders would also face defaults.
4. Policy Credibility Hit
The equity conversion was framed as a bold, innovative step. If Vi collapses, public trust in such bailouts could diminish.
Will the Government Intervene Again?
While the equity infusion was significant, many now wonder if a more active intervention is needed — such as:
- Direct financial aid or soft loans
- A complete waiver of legacy dues
- Regulatory clarity for future investments
However, this raises ethical and fiscal concerns: should public funds be used to continually support a private entity unable to compete?