The Indian government is considering a number of options to support Vodafone Idea (Vi), amid the telco's ongoing financial struggles.

India's government owns around 49 percent of the carrier, India's third-biggest mobile operator.

The company, which was created in 2018 following the merger of Vodafone India and Idea Cellular, has been struggling to pay its dues to its vendor partners after it was saved from the brink of collapse by the Indian government three years ago.

However, the Economic Times has this week reported that the situation is still very challenging for Vi, which is still paying off its dues. These dues include payments to tower operators and spectrum fees.

The website reports that the government is considering increasing the repayment deadline from six to 20 years, and converting interest calculations from compound to simple interest.

On top of this, the government could ask Vi to pay between INR10 billion (US$116.39 million) and INR15 billion ($174.59 million) each year toward part payment of those dues until a final decision is taken on the broader AGR issue, said a person in the know.

Vi's financial challenges have heavily impacted the company's 5G rollout, which only launched in March, two-and-a-half years behind schedule.

For context, rival domestic telcos Reliance Jio and Bharti Airtel launched their 5G networks in October 2022.

The company still owes around $9.68bn in AGR dues. By the end of this year, the carrier has to pay at least $2bn of this figure, while its cash reserve currently sits at $1.15bn.

“Apart from these two options, some other creative proposals are also being explored, and the relief may be given by either one or a combination of options,” a source told the Economic Times.

The government wants to keep Vi afloat to ensure the market has three mobile operators, thus avoiding a duopoly.

Vi currently has around 205 million mobile subscribers, though in 2021 the company had around 242 million, representing a sharp decline.