Vodafone Idea to Centre: Need Support to Survive Beyond FY26, Say Sources

Vodafone Idea Ltd (Vi) has sent a clear message to the Indian government: without more support, it may be unable to keep operating past the 2025–26 financial year. Sources told CNBC-TV18 that the company has openly shared its financial struggles with the Centre, stressing that urgent help is needed to stay afloat.

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Financial Stress Keeps Mounting

Even after some relief from the government, Vi is still under heavy financial pressure. The company is sitting on a large debt pile and struggling to earn enough to meet its financial obligations. 

With fierce competition in the telecom industry and a shrinking market share, Vi's situation is becoming more difficult by the day.

Previous government efforts, like converting ₹36,950 crore of spectrum dues into equity, offered some breathing room. That move gave the government a nearly 49% stake in Vi and freed up about ₹40,000 crore over three years. But experts warn that these short-term fixes won’t be enough to secure the company’s future.

Bank Guarantee Relief: Not So Simple

In December 2024, the Cabinet approved a significant decision: telecom companies, including Vi, wouldn’t need to provide bank guarantees, a move meant to ease their financial load and help them operate their business easily during these hard times . For Vi, this meant a potential relief of ₹24,800 crore, a big deal for its network expansion plans.

But there’s a catch. The Department of Telecommunications wants Vi to submit a solid revival plan before granting this waiver. In other words, the government says, “We’ll help, but only if you show us a clear path to recovery.”

Chasing Funds, Facing Delays

Vi is trying to raise ₹25,000 crore in loans and another ₹10,000 crore through guarantees or letters of credit to support its expansion. It’s already secured ₹24,000 crore in equity funding. Still, finding lenders willing to pitch in remains a tough challenge.

Another hurdle is the delay in rolling out 5G services. While rivals like Bharti Airtel and Reliance Jio are moving fast on 5G, Vi is stuck, mainly because of money troubles and delays in signing deals with equipment vendors.

What’s at Stake for the Telecom Industry

The telecom sector could feel the ripple effects if Vi is pushed out of the Indian market. Less competition might mean higher prices and slower innovation, which could hurt consumers in the long run. Plus, with the government now holding a big chunk of Vi's shares, it's caught between being a business partner and a regulator, which is tricky.

Where Things Stand

Vodafone Idea’s warning is a wake-up call. The company is on shaky ground and needs a clear, realistic recovery plan fast. Government help has bought some time, but the real test is ahead: Can Vi raise enough money, fix its operations, and compete in the long run? The answer will shape not just the company's future but the future of India’s telecom industry, too.