Synopsis: Vodafone Idea is making a significant effort to bounce back after facing financial troubles, huge AGR dues, and subscriber losses. With support from the government, a Rs 45,000 crore investment plan, and renewed confidence from its promoters, can India’s third-largest telecom operator genuinely compete again with Jio and Airtel?
Vodafone Idea is struggling to recover after years of challenges, AGR setbacks, mounting debt, and a massive decline in customer base. With a government bailout, an ambitious Rs 45,000 crore revival plan, and renewed backing from its promoters, the main question remains: can Vi truly compete with Jio and Airtel once more, or is it merely fighting for survival?
With a market capitalisation of Rs 1,24,486 crore, Vodafone Idea Ltd is currently trading at Rs 11.49 per share, up 0.09 percent from its previous close of Rs 11.48. Over the past five years, however, the stock has fallen by over 8 percent, sharply underperforming the NIFTY 50, which delivered nearly 71 percent returns in the same period. The numbers reflect a company that has struggled while the broader market moved ahead.
How Things Went Wrong
Vodafone Idea was formed in 2018 when Vodafone India and Idea Cellular merged to become a stronger player in India’s telecom market. At that time, the industry was already facing intense price competition following Reliance Jio’s entry. The merger aimed to enhance scale and financial strength. Instead, the company quickly struggled for survival.
The most damaging blow came from the AGR issue. AGR, or Adjusted Gross Revenue, is the revenue on which telecom companies must pay license fees and spectrum usage charges to the government. For years, telecom operators and the government disagreed on how to calculate AGR. In 2020, the Supreme Court sided with the government’s definition, which significantly raised the dues that telecom companies had to pay.
This ruling was particularly devastating for Vodafone Idea. Its liabilities soared due to past dues, penalties, and interest. By FY25, total AGR dues across telecom operators exceeded Rs 1.77 lakh crore, with Vodafone Idea accounting for almost half of that amount. The company’s total debt rose above Rs 2 lakh crore, making it one of the most heavily debt-laden companies in the country.
As of September 30, 2025, Vodafone Idea’s total debt was around Rs 2,02,409 crore. Over Rs 2 lakh crore of this was made up of deferred spectrum payments and AGR liabilities owed to the government, while about Rs 1,500 crore came from bank loans. This indicates that most of the company’s financial pressure stems from government dues rather than traditional bank loans.
Due to this financial burden, Vodafone Idea was unable to invest sufficiently in upgrading its network. As competitors rolled out stronger 4G and expanded 5G networks, Vodafone Idea fell behind. Subscriber losses followed. When a telecom network deteriorates, customers switch quickly, and this is exactly what happened.
The Government Lifeline
When Vodafone Idea seemed on the verge of collapse, the government intervened with relief measures. Rather than demanding immediate cash repayment of massive dues, it converted a large part of the outstanding spectrum dues into equity.
In April 2025, the government changed about Rs 36,950 crore of spectrum dues into shares. Consequently, its stake in Vodafone Idea increased from roughly 22.6 percent to 48.99 percent. The government effectively became the largest shareholder, owning nearly half of the company.
This action provided Vodafone Idea with some breathing room. It alleviated immediate repayment pressures and improved the company’s net worth. However, the government made it clear that this was not an open-ended rescue. Future conversions would not be limitless. The company needed to stabilise itself.
Additional relief came when AGR dues were frozen. Earlier this month, the government granted Vodafone Idea a crucial decision by freezing the company’s AGR dues at Rs 87,695 crore, fixing that amount until the end of 2025, and extending repayments over 16 years, up to the year 2041.
Starting from March 2026, Vodafone Idea will pay Rs 124 crore annually for six years, then reduce payments to Rs 100 crore a year for the following four years. In the meantime, a government committee will intervene to reassess and finalise the actual AGR bill. The larger payments on these revised dues won’t begin until March 2036. For now, the pressure has eased, and Vodafone Idea gets some breathing space to stabilise its business and invest in its network.
Promoter confidence also appeared to be returning. Kumar Mangalam Birla bought 4.09 crore shares between January 30 and February 1, 2026, for about Rs 45 crore. Although this represented only around 0.04 percent of equity, its symbolic value was significant. It indicated that the promoter group is not abandoning the company.
VI 2.0: The Comeback Plan
Vodafone Idea’s revival strategy can be termed as “VI 2.0.” The company plans to invest Rs 45,000 crore over the next three years to rebuild and expand its network. The goals are clear. First, improve 4G coverage in weak areas.
Next, roll out 5G in a focused manner instead of spreading resources too thin. Through its 17–5–5 strategy, the company aims to restore strong coverage in 17 priority markets, ensure full 2G to 4G coverage in five more regions, and provide a seamless 5G experience in key urban centres. It also intends to extend coverage in rural and remote areas using satellite connectivity.
Over the next three years, Vodafone Idea has set three main goals. It aims for consistent subscriber growth, double-digit revenue growth, and positive cash EBITDA generation. In simple terms, it seeks more users, more revenue per user, and healthier cash flows.
The Reality Check: ARPU and Subscriber Losses
Despite the revival plan, serious challenges persist. Vodafone Idea’s biggest issue today is ARPU, or average revenue per user. This measures how much money the company makes from each customer every month.
Vodafone Idea’s ARPU remains below Rs 200, significantly lower than its competitors. Reliance Jio and Bharti Airtel have both surpassed Rs 200, with Airtel’s ARPU exceeding Rs 250. This difference is important because higher ARPU means more money available to invest in network upgrades and technology.
Subscriber data also reflects a concerning trend. In November, Reliance Jio added about 1.39 million subscribers, and Bharti Airtel added around 1.22 million. In contrast, Vodafone Idea lost nearly 1.01 million subscribers. This illustrates that while competitors continue to grow, Vodafone Idea is still working to stabilise its customer base.
Meanwhile, both Jio and Airtel have strong financial positions and positive cash flows. They have already deployed extensive 5G networks and continue to invest aggressively. Because they have larger subscriber bases and better ARPU, they can distribute network costs among more users, improving profitability.
In addition, Vodafone Idea has been dealing with several operational issues, including a slower deployment of 5G, which is only accessible in 43 cities, while competitors like Airtel and Jio already provide statewide coverage. As a result, a large number of high-data users have moved to operators with 5G networks that are quicker and more dependable. Additionally, call dropouts, poor indoor signals, and erratic 4G connectivity have all been reported by users, suggesting that VI’s network quality still trails below that of its counterparts.
In the meantime, firms like BSNL have benefited from price-sensitive consumers searching for less expensive options due to recent tariff hikes. Concerns about poor customer service, trouble contacting service executives, and the activation of unwanted services have also been raised by VI’s customers. Despite continuous efforts to stabilise the business, these problems have made it more difficult for Vodafone Idea to keep users.
Financials
The revenue from operations for Vodafone Idea stands at Rs 11,323 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 11,117 crores, up by 1.8 per cent YoY. Additionally, on a QoQ basis, it reported a growth of 1.1 percent from Rs 11,195 crore.
Also, EBITDA stood at Rs 4,817 crore in Q3 FY26, a growth of 2 percent as compared to Rs 4,712 crore in Q3 FY25. Additionally, on a QoQ basis, it reported a growth of 3 percent from Rs 4,684 crore. Also, coming to the margins front, EBITDA margins increased by 360 bps YoY, reaching 43 percent in Q3 FY26.
Coming down to its profitability, the company’s net loss narrowed to Rs 5,286 crore in Q3 FY26, as compared to a loss of Rs 6,609 crore in Q3 FY25 and from a loss of Rs 5,524 crore in Q2 FY26.
Is Vodafone Idea Too Big to Fail?
Vodafone Idea plays a crucial role in India’s telecom landscape. The country effectively has three main private players: Jio, Airtel, and Vodafone Idea. If Vodafone Idea fails, the market could shift toward a duopoly. This could reduce competition and potentially lead to higher tariffs over time, which could in turn lead to angry and disappointed consumers in an economy like India. This is one reason why policymakers have shown support.
Currently, Vodafone Idea is no longer at immediate risk of collapse. Its dues are now structured over many years as the government owns nearly half the company, and promoters remain involved, highlighting a clear investment plan in place.
However, surviving and succeeding are not the same. For Vodafone Idea to effectively compete again, it must increase ARPU without losing more customers, stop its subscriber decline, successfully implement its Rs 45,000 crore capex plan, and attract new capital if necessary. The risk of execution remains high.
The company has moved from “Will it survive?” to “Can it compete?” That marks progress. But catching up with Jio and Airtel will require consistent performance over several years. For now, Vodafone Idea’s future looks less grim than before, but the real challenge begins now.
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