New Delhi, April 24, 2025 — In a significant move that could reshape India’s telecom landscape, Bharti Airtel has officially written to the Department of Telecommunications (DoT), requesting conversion of its statutory dues into government equity. This request aligns with the provisions of the 2021 telecom reforms package, signaling a shift in Airtel’s earlier stance and a push for a level playing field in the industry.
According to senior government officials quoted by The Economic Times, Airtel’s move is motivated by the recent government action that saw its stake in Vodafone Idea cross 49%—a development stemming from a similar equity conversion of dues by the struggling telecom player.
While Airtel has not issued a public statement or responded to ET’s query, sources close to the matter suggest that the telco is now looking to ensure it is not placed at a competitive disadvantage, especially with the AGR moratorium deadline approaching in 2025-2026.
AGR Dues: A Lingering Burden
The Indian telecom sector has been wrestling with massive adjusted gross revenue (AGR) dues ever since the Supreme Court’s October 2019 ruling, which upheld the government’s interpretation of revenue calculations. This ruling burdened telecom operators with a total of Rs 1.47 lakh crore, comprising:
Rs 92,642 crore in licence fees
Rs 55,054 crore in spectrum usage charges (SUC)
Nearly 75% of the dues constituted penalties, interest, and interest on penalties
The industry was already struggling due to cutthroat competition, triggered largely by Reliance Jio’s market disruption in 2016, which drove tariffs to record lows and eroded profit margins across the board.
The 2021 Lifeline and What Comes Next
To alleviate financial stress, the government in September 2021 introduced a telecom relief package, offering:
A four-year moratorium on payment of statutory dues
Option to convert deferred dues into equity
Structured repayment plans from 2026 to 2031, requiring 10% payment annually by March 31
While Vodafone Idea was quick to embrace both the moratorium and the equity conversion, Bharti Airtel chose to defer only its payments—until now.
Airtel’s fresh application suggests a strategic recalibration, especially after the DoT reportedly paused its proposal to waive 50% of interest and penalties on AGR dues—a plan that was supposed to offer additional relief but has since been shelved.
Industry-Wide Implications
Experts suggest that if the government agrees to Airtel’s request, it could set a new precedent for other telecom players, especially those with large outstanding dues. It may also spark debates about the fairness and uniformity of government interventions in the private sector.
“By seeking equity conversion now, Airtel is signaling its intent to stay competitive while minimizing long-term liabilities,” said a senior telecom analyst. “This could also be a preemptive move to avoid cash flow pressure once the repayment cycles begin in 2026.”
What Lies Ahead?
With the moratorium deadline looming and 2026 repayments drawing closer, telcos are reassessing their financial strategies. The government, on the other hand, will need to balance market stability, revenue collection, and investor confidence as it evaluates requests like Airtel’s.
Should the DoT accept Airtel’s plea, it would increase the government’s stake in yet another major private telecom operator, potentially strengthening its influence in the sector while reducing immediate financial strain on Airtel.
