IDEA - VODAFONE IDEA LIMITED Share Price

Vodafone Idea Limited's management provided a positive outlook during the Q2 FY '26 earnings call held on November 11, 2025. CEO Abhijit Kishore emphasized the importance of the recent Supreme Court ruling allowing the government to reassess additional AGR demands, positioning the company for potential relief. Management believes the telecommunications sector in India presents substantial growth opportunities, evidenced by a strong increase in digital transactions, as UPI reached 19.6 billion transactions worth nearly Rs. 25 lakh crores, showcasing deep digital integration.

The company has expanded its 5G services to all 17 circles where it holds spectrum, contributing to 99% of its revenue. In the current quarter, capital expenditures (capex) amounted to Rs. 17.5 billion, with guidance for FY26 capex projected between Rs. 75 billion and Rs. 80 billion. This investment is aimed at expanding 4G coverage from 84% to 90% and enhancing network capacity, having added 1,500 new unique 4G towers during the quarter.

Management reported a revenue of Rs. 111.9 billion for Q2 FY '26, a growth of 2.4% year-over-year, while the cash EBITDA reached Rs. 22.5 billion, although it saw a decline of 3.4% year-over-year due to increased network operating costs. Subscriber numbers for 4G and 5G combined reached 127.8 million, marking an addition of approximately 0.4 million customers over the past year. They noted significant achievements, such as a 21.4% growth in data traffic and an 8.7% increase in Consumer ARPU to Rs. 180.

Management's strategic focus includes enhancing customer experience through unique product propositions like the Non-Stop Hero Plan and various service enhancements via the Vi App. They expressed optimism over the trajectory of subscriber metrics and emphasized their commitment to becoming a key player in India's digital ecosystem.

Major Questions and Answers from the Q&A Section of Vodafone Idea Limited Earnings Call (11 November 2025)

1. Question: "Firstly, on the subscriber trend. Subscribers actually increased quarter-on-quarter. What drove that? Are you seeing any churn out to BSNL because BSNL reported gross subscriber addition for the month of August to September? In the area where you have rolled out 5G, how has been the subscriber traction and are you seeing lower churn in those areas?"

Answer: I acknowledge there was a marginal drop in overall subscribers this quarter, primarily influenced by seasonal factors. However, our churn has improved significantly from 5.2 million to just 1 million this quarter. Our 4G and 5G services are gaining traction in areas we've invested heavily, showing lower churn and better engagement, with data usage per customer increasing to 18.5 GB/day.

2. Question: "What is the outlook on Capex for the second half of the year and how much of it is dependent on the additional capital raise?"

Answer: For H2 FY26, we expect to complete Capex of Rs. 7,500 to Rs. 8,000 crores. This amount will primarily be funded through internal accruals and existing resources, and we do not anticipate requiring external funding specifically for this expenditure.

3. Question: "Any guidance as to when we can see positive subscriber additions or subscriber churn turning around?"

Answer: We aim to enhance customer engagement through improved product offerings and network enhancements. While I can't provide a specific timeline, I believe as we continue expanding our 4G and 5G coverage, we should see a positive turnaround in subscriber trends.

4. Question: "What is our sense? When do you see this reversing to a gain starting?"

Answer: While I can't tie subscriber growth solely to reaching 90% coverage, enhancing our network and propositions will definitely influence churn positively. We are committed to improving customer experiences to boost retention and growth in the subscriber base.

5. Question: "What sort of timeline are we expecting in terms of conclusion regarding ESG dues with the DoT?"

Answer: We appreciate the Supreme Court's order and are in discussions with DoT. While I cannot provide a specific timeline, we are optimistic about reaching a resolution soon, especially given the government's supportive stance as a 49% shareholder.

6. Question: "Do you think banks will be waiting for an official relief package from the government for funding?"

Answer: Yes, the recent Supreme Court order indicates a supportive direction, and while banks may take time to react fully, we are engaged closely with them on funding discussions that could evolve independently of the relief package.

7. Question: "With respect to our end goal of 90% coverage for 4G, what is the timeline we are looking at, and how much more Capex will be required to reach 90%?"

Answer: We're currently at 84% and aim to reach 90% within the next couple of quarters, requiring approximate Capex of Rs. 4,000 crores. However, we are balancing expansion with our 5G rollout.

8. Question: "Can you share additional KPIs with respect to 5G network rollout and whether these networks handle a large part of your traffic?"

Answer: While it is still early for detailed KPIs, in the circles where we launched 5G, we've observed improved traffic handling due to offloading onto the new network. The rollout is still in initial stages, focusing on enhancing user experience and capacity.

9. Question: "What is the subscriber count on 5G as of the end of the quarter?"

Answer: We don't disclose separate subscriber counts for 4G and 5G; we report them as a combined total. Hence, I'm unable to provide a specific figure for 5G alone at this time.

10. Question: "How do you plan to expand capacity and experience to grow our customer base?"

Answer: We have adequate headroom in both 4G and 5G networks, with ongoing improvements in coverage to enhance subscriber experiences. Our main focus is to drive engagement through unique product propositions, which we believe will directly increase our customer base.