New Delhi: Vodafone Idea has approached India’s Supreme Court to challenge the government’s refusal to waive more than $5 billion in interest and penalties on dues it owes, documents reveal. The telecom giant, burdened by heavy debt, is fighting to avoid financial collapse.
On April 29, the Indian communications ministry formally rejected a request made by Vodafone Idea CEO Akshaya Moondra to waive penalties and interest related to $9.76 billion in outstanding dues. A letter, seen by Reuters on Sunday, stated bluntly: “The request cannot be considered,” citing concerns over the survival of India’s third-largest telecom operator.
Vodafone Idea, a joint venture between the UK’s Vodafone Group Plc and India’s Aditya Birla Group, submitted a plea to the Supreme Court on Thursday. The filing, which remains confidential, urges the court to compel New Delhi to act “in public interest,” highlighting the critical importance of the “sensitive telecom sector” to the nation’s economy.
Neither Vodafone Idea nor the government responded to requests for comment on the matter.
The financial strain on Vodafone Idea traces back to a landmark 2019 Supreme Court ruling that expanded the definition of adjusted gross revenue (AGR), dramatically increasing the scope of dues telecom companies must pay. This ruling has been a persistent challenge for the industry, with billions of dollars demanded in additional payments.
To alleviate Vodafone Idea’s distress, the government has converted portions of its dues into equity, raising its ownership stake in the company to 49%. Despite these efforts, the Supreme Court has repeatedly dismissed Vodafone Idea’s attempts to alter rulings ordering the recovery of outstanding dues.
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It remains unclear how much relief Vodafone Idea seeks on the $9.76 billion principal amount, but court documents indicate penalties and interest alone exceed $5 billion.
Rival telecom company Bharti Airtel faces similar dues and has made unsuccessful legal challenges. However, Vodafone Idea’s financial position is more precarious.
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“No support will lead to a point of no return,” Moondra warned in his April 17 letter. He cautioned, “The company will not be able to operate beyond FY26.” He further stated that failure to resolve the issue “will create a larger damage to country’s reputation and will shake the confidence of global investors.”
Vodafone Idea’s net debt stood at $25 billion as of September, according to brokerage CLSA.
