Vodafone Idea Q2 net loss narrows to ₹7,175 crore, Arpu rises to ₹156

Vodafone Idea Ltd’s losses narrowed to ₹7,175 crore in the September quarter, down from ₹8,746 crore a year earlier, as revenues edged up to ₹10,932 crore from ₹10,716 crore. The struggling telecom carrier, however, continued to push for further tariff rationalization across the industry, citing the need to cover capital costs.

Average revenue per user (Arpu)—a key profitability indicator—rose to ₹156 from ₹142 a year ago and ₹146 in the prior quarter, driven by tariff hikes executed in June and the actual effect kicking in from the September quarter. 

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The Arpu boost reflects broader trends in India’s telecom sector, with all major players benefiting from price increases of 10–21% across the board. While larger rivals Reliance Jio and Bharti Airtel raised entry-level 5G tariffs by over 45%, Vodafone Idea saw gains from the rise in 4G rates.

Vodafone Idea’s subscriber base stood at 205 million as of September, with 126 million 4G users, down from 219.8 million the year before. The decline largely stemmed from SIM consolidation following the tariff hikes.

“The impact of recent tariff interventions can be seen in improved ARPUs and revenue for the quarter, though the full impact will be reflected over the next couple of quarters. Further tariff rationalization is needed for the industry to fully cover its cost of capital,” said Akshaya Moondra, CEO, Vodafone Idea.

Moondra echoed the stance of Jio and Airtel, both of which support further tariff hikes to enhance carriers’ return on capital employed.

Funding and capex plans

Backed by the Aditya Birla Group, Vodafone Idea is currently in discussions with lenders to secure ₹35,000 crore in debt funding to fuel its network expansion.

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“On the debt raise, we remain engaged with our lenders for tying up debt funding towards the execution of our network expansion with planned capex of Rs. 500 to 550 billion over next three years,” Moondra said.

The carrier reported significant strides in network capability, expanding 4G data capacity by 14% and increasing coverage to an additional 22 million people, according to Moondra. This boosted 4G speeds by 18%. 

Vodafone Idea also closed long-term contracts worth $3.6 billion with Nokia, Ericsson, and Samsung, securing equipment supply for the next three years.

Nokia, in a separate statement on Wednesday, noted plans to add 3,300 new sites and upgrade over 42,000 technology sites by March 2025. Around 25,000 spectrum expansions have been completed across Vodafone Idea’s network, enhancing data capacity. To date, 15% of the new sites have been completed.

Earlier this year, loss-making Vodafone Idea raised ₹24,500 crore through India’s largest follow-on public offer (FPO), issuing equity worth ₹2,460 crore to equipment vendors Nokia and Ericsson in lieu of dues and providing preferential shares worth ₹2,080 crore to its promoter group.

The new capital will fund 4G expansion across 17 priority circles, a 5G launch in key cities, and broader capacity upgrades to meet rising data demand. Vodafone Idea plans to launch 5G services in Delhi and Mumbai by December, aiming to cover 15,000 sites by March 2025, Mint reported last month.

Earnings before interest, tax, depreciation, and amortization (Ebitda) rose to ₹4,550 crore, with an Ebitda margin of 41.6% for the quarter. Capex for the quarter stood at ₹1,360 crore—the lowest among peers despite extensive network expansion agreements.

The telco reported the addition of 42,000 4G sites, marking its largest-ever quarterly increase in 4G coverage. Vodafone Idea also enhanced its network by deploying 4G on the sub-GHz 900 band across 20,500 sites, including upgrades on recently acquired 900 MHz spectrum in certain circles. This provided improved indoor coverage and increased capacity, with an additional 21,200 sites added on the 1800 MHz and 2100 MHz bands to support faster data speeds.

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The company reduced its 3G footprint, shutting down 19,700 3G sites and leaving coverage in just eight circles as of September. As reported by Mint last month, Vodafone Idea is on track to phase out 3G services completely by April next year.