**Executive Summary**
This document is a response to an unstarred question in Lok Sabha regarding the financial stress faced by telecom operators in India. The response, dated February 4th, 2026, details various structural and process reforms undertaken by the government in the past five years to address this stress and promote sectoral stability.
**Key Points / Main Content**
* **Adjusted Gross Revenue (AGR):**
* Rationalization of the definition of Adjusted Gross Revenue (AGR).
* Rationalization of Interest rates and removal of Penalties for delayed payments of License Fee (LF)/Spectrum Usage Charges (SUC).
* Removal of the requirement to pay an additional 0.5% of AGR as SUC on sharing of spectrum.
* **Spectrum Auctions and Usage Charges:**
* Removal of levy of Spectrum Usage Charges on the spectrum acquired in auctions held after September 2021.
* Provision for payment of Spectrum auction bids in 20 equal annual installments for auctions held after September 2021.
* Requirement of securitizing annual deferred spectrum instalment with a Financial Bank Guarantee has been rationalised in Spectrum auctions held before September 2021, if certain conditions are met. This requirement has been removed for auctions held after September 2021.
* Surrender of spectrum will be permitted after 10 years for spectrum acquired in auctions held after September 2021.
* **Other Reforms:**
* Rationalization of Bank Guarantee requirements under the license agreement.
* Moratorium of up to four years in annual payments of dues arising out of the AGR judgement of the Hon'ble Supreme Court and spectrum purchased in past auctions held before 2021, applicable to access service licenses that are not under insolvency / liquidation proceedings.
* Option to the Telecom Service Providers (TSPs) to pay the interest amount arising due to the said deferment of payment by way of equity was also given. Further, at the option of the Government and based on the prevailing situation, the outstanding amount of post-moratorium installments may be converted into equity.
* To encourage investment, 100% Foreign Direct Investment (FDI) under automatic route permitted in Telecom Sector with applicable safeguards.
* **Vodafone Idea Limited (VIL):**
* Restructuring and reassessment of AGR dues of VIL have been approved.
**Impact Analysis**
**Telecom Operators**
* **Impact:** Reduced financial stress through revised payment terms, rationalized AGR definitions, and elimination of certain charges.
* **Action Required:** To consider and implement the revised payment and charge structures, and to evaluate the possibility of applying for moratoriums or FDI.
**Consumers**
* **Impact:** The reforms aim to protect consumer interests by ensuring competitive and sustainable telecom services.
* **Action Required:** None, as these measures aim to indirectly benefit consumers through a more stable telecom sector.
**Government**
* **Impact:** Potentially reduced revenue in the short term due to moratoriums and revised payment structures. However, the reforms are revenue neutral and designed to foster long-term sectoral stability and growth, as reflected in the growth of the telecom sector's gross revenue from ₹2.73 lakh crore in FY 2020-21 to ₹3.79 lakh crore in FY 2024-25, reflecting a Compound Annual Growth Rate (CAGR) of approximately 8.5%.
* **Action Required:** To monitor the impact of the reforms on government revenue and the overall health of the telecom sector.
Key Entities Referenced
Adjusted Gross Revenue (AGR): A metric used to calculate the dues telecom operators owe to the government.
Ministry of Communications: The government ministry responsible for telecommunications policy.
Spectrum Usage Charges (SUC): Charges levied on telecom companies for using radio spectrum.
Foreign Direct Investment (FDI): Policy permitting 100% FDI under automatic route in the Telecom Sector
Vodafone Idea Limited (VIL): Telecom operator whose AGR dues were restructured and reassessed as a result of a Supreme Court order.
GOVERNMENT OF INDIA
MINISTRY OF COMMUNICATIONS
DEPARTMENT OF TELECOMMUNICATIONS
LOK SABHA
UNSTARRED QUESTION NO. 755
TO BE ANSWERED ON 4TH FEBRUARY, 2026
FINANCIAL STRESS FACED BY TELECOM OPERATORS
755. DR. AMAR SINGH:
Will the Minister of COMMUNICATIONS be pleased to state:
(a) whether the Government has considered the financial stress faced by telecom operators
arising from adjusted gross revenue liabilities and its implications for sectoral stability;
(b) if so, the details of policy considerations undertaken by the Government while balancing
consumer interest, public revenue and competitive sustainability; and
(c) the long-term regulatory approach proposed by the Government to prevent recurrence of
financial distress in the telecommunications sector?
ANSWER
MINISTER OF STATE FOR COMMUNICATIONS AND RURAL DEVELOPMENT
(DR. PEMMASANI CHANDRA SEKHAR)
(a) to (c) To address the issue of financial stress in the telecom sector the Government has
approved various structural and process reforms in the telecom sector over the last five years. The
key reforms are as below:
i. Rationalization of Definition of Adjusted Gross Revenue (AGR).
ii. Rationalization of Interest rates and removal of Penalties for delayed payments of
License Fee (LF)/Spectrum Usage Charges (SUC).
iii. Rationalization of Bank Guarantee requirements under the license agreement.
iv. Removal of levy of Spectrum Usage Charges on the spectrum acquired in auctions held
after September 2021.
v. Provision for payment of Spectrum auction bids in 20 equal annual instalments for
auctions held after September 2021.
vi. Requirement of securitizing annual deferred spectrum instalment with a Financial Bank
Guarantee has been done away with in Spectrum auctions held after September 2021,
while for auctions conducted prior to 2021, the same requirement has been rationalised,
if certain conditions are met.
vii. Surrender of spectrum will be permitted after 10 years for spectrum acquired in auctions
held after September 2021.
viii. The requirement of payment of additional 0.5% of AGR as SUC on sharing of spectrum
has been removed.
ix. Moratorium of up to four years in annual payments of dues arising out of the AGR
judgement of the Hon’ble Supreme Court and spectrum purchased in past auctions held
before 2021, applicable to access service licenses that are not under insolvency /
liquidation proceedings. The moratorium is revenue neutral and Net Present Value
(NPV) of the deferred payment is protected. Option to the Telecom Service Providers
1(TSPs) to pay the interest amount arising due to the said deferment of payment by way
of equity was also given. Further, at the option of the Government and based on the
prevailing situation, the outstanding amount of post-moratorium installments may be
converted into equity.
x. To encourage investment, 100% Foreign Direct Investment (FDI) under automatic
route permitted in Telecom Sector with applicable safeguards.
Further, in pursuance of the orders of the Hon’ble Supreme Court in Writ Petition (Civil) No.
882/2025 and the representation submitted by Vodafone Idea Limited (VIL), restructuring and
reassessment of AGR dues of VIL have been approved.
The sectoral measures were introduced to promote healthy competition, protect interests of
consumers, infuse liquidity, encourage investment and reduce regulatory burden on Telecom Service
Providers. They were formulated after considering representations from industry associations,
financial institutions, and inter-ministerial consultations involving relevant Ministries, wherever
applicable. It may be noted that the telecom sector's gross revenue has grown significantly from
₹2.73 lakh crore in FY 2020-21 to ₹3.79 lakh crore in FY 2024-25, reflecting a Compound Annual
Growth Rate (CAGR) of approximately 8.5%, to which these measures have been a contributing
factor.
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