IDEA - VODAFONE IDEA LIMITED Share Price

Management's outlook for Vodafone Idea Limited (VIL) emphasizes the critical phase ahead as they continue to improve their network and subscriber base. Key forward-looking points provided during the earnings call include:

1. 5G Rollout and Coverage Goals: VIL initiated its 5G rollout in March 2025, with services launched in cities such as Mumbai, Delhi, Chandigarh, and Patna. The goal is to expand 5G services to all 17 circles where they possess spectrum by August 2025. They plan to increase 4G tower counts to approximately 215,000, boosting 4G population coverage to around 90%.

2. Capital Expenditure Plans: VIL invested Rs.42.8 billion in Q4 FY25, marking the highest quarterly capex since their merger. Total capex for FY25 was Rs.96.2 billion. For FY26, management indicated that they would incur capex of around Rs.6,000 crore for network expansion, which is critical for achieving their coverage targets.

3. Subscriber Growth Initiatives: Management reported a reduction in subscriber loss and expressed confidence in further improving metrics with ongoing investments. They are focused on revamping their service offerings, such as launching new postpaid and prepaid plans, including the Nonstop Hero Plan aimed at increasing their ARPU and subscriber base.

4. Engagement with the Government: There is an ongoing discussion with the government regarding the conversion of spectrum auction dues into equity, which recently occurred, raising the Government of India's shareholding from 22.6% to 49%. This move is expected to alleviate some financial pressures on VIL and improve its capital structure.

5. Financial Performance: For Q4 FY25, VIL reported revenues of Rs.110.1 billion, up 3.8% YoY, and an annual revenue of Rs.435.7 billion, representing a growth of 2.2%. The EBITDA for FY25 was Rs.181.3 billion, a 6% increase from FY24.

6. Future Focus: Management highlighted their commitment to a deeper digital ecosystem via partnerships and the introduction of innovative features in the Vi App, aiming to drive user engagement and monetization.

These initiatives outline VIL's proactive approach to tackle challenges and leverage growth opportunities in the evolving telecom landscape in India.

1. Sanjesh Jain: "When should the benefit of this network expansion be visible in terms of 4G additions accelerating?" Akshaya Moondra: "The last quarter saw nominal 4G subscriber growth of about 0.4 million. As we continue investing and roll out 5G, we anticipate improved metrics, including reductions in subscriber loss and better 4G subscriber additions. A concerted effort in network enhancement should yield more substantial results soon."

2. Vivekanand Subbaraman: "Is there any engagement with the government for usage-linked pricing?" Akshaya Moondra: "Discussions about tariff structures are industry-driven and not solely government-related. Industry consensus is vital for implementing incremental pricing based on usage, necessary for raising ARPU sustainably."

3. Saurabh Handa: "Can the government provide relief without specific clarity from the courts?" Akshaya Moondra: "Historically, the Supreme Court has indicated that regulatory reforms are within the government's purview. Therefore, the government could act to offer relief without conflict with court rulings."

4. Gaurav Malhotra: "Is the site count of 224,000 still linked to bank debt funding?" Akshaya Moondra: "Yes, while we currently aim for 84% coverage and maintain our capex efforts, achieving the full target of 220,000 sites largely requires bank funding to support our expansion strategy."