MUMBAI: Vodafone Idea (Vi) is ringing in revenue growth, but the static of debt remains loud. The telecom giant reported Rs 111.2 billion in revenue for Q3FY25, marking a 1.7 per cent sequential increase, and clocked its highest quarterly cash EBITDA of Rs 24.5 billion since the Vodafone-Idea merger. However, despite operational improvements, Vi remains in the red, posting a net loss of Rs 66.1 billion.
The company’s average revenue per user (ARPU) rose to Rs 173, reflecting a 4.7 per cent QoQ jump, largely driven by tariff hikes and customer upgrades. But its financial burden remains steep. Bank debt stands at Rs 23.3 billion, while spectrum and AGR dues total a staggering Rs 2.27 trillion, payable over two decades.
Vi is pushing forward with a massive capex plan, spending Rs 53.3 billion in the first nine months of FY25, with a full-year target of Rs 100 billion. The company added 4,000 broadband towers, its highest in a single quarter since the merger, and expanded 4G coverage to 41 million more users, reaching 1.07 billion people.
A phased 5G rollout is now officially in motion, with Mumbai set to go live by March 2025, followed by Delhi, Bengaluru, Chandigarh, and Patna in April. The telco is banking on this expansion to sharpen its competitive edge.
To keep its balance sheet in check, Vi has secured Rs 19.1 billion in fresh equity capital from its promoter group, pushing its total equity infusion to Rs 260 billion in the last 10 months. The company also received a bank guarantee waiver on spectrum payments, offering temporary relief.
Vodafone Idea is also in the middle of another fresh financial hurdle as the Department of Telecommunications (DoT) has demanded a Rs 6,090 crore bank guarantee by March 10 to cover spectrum obligations since 2015, offering an alternative cash payment of Rs 5,493 crore. The telco must choose one of these options and comply with the telecom department’s requirements, adding to its existing financial woes amid intense industry competition. This development comes as a major setback for Vi, which is already grappling with Rs 2.27 trillion in spectrum and AGR dues. However, some relief arrived in January when the Supreme Court upheld the Bombay High Court’s November 2023 decision granting Vi a Rs 1,600 crore tax refund, providing a temporary financial cushion as the telco continues its struggle to stabilise operations.
While Vi is making strides in revenue and expansion, the question remains, can it dial up a full-fledged recovery, or will the weight of its debt drop the call?
