In at the moment’s Finshots, we discover whether or not Vodafone Thought has lastly accomplished sufficient to reverse its long-standing cycle of decline.
However here is a fast sidenote earlier than we start. We’ll be taking a publishing off tomorrow on account of Independence Day. However don’t fear, we’ll ship you a fast wrapup in our Sunday e-newsletter, together with the weekly quiz and quiz toppers. See you within the Sunny Facet Up, and blissful Independence Day, people!
Now, on to at the moment’s story.
The Story
After I interviewed for Finshots with our co-founder, Shrehith, we had an intensive dialog about all kinds of issues, from the inventory market and rates of interest to authorities coverage and the broader financial system. However one dialog has stayed with me. We spent fairly a little bit of time speaking about Vodafone Thought and whether or not the corporate might ever make a comeback.
You see, on the time, the reply appeared removed from apparent. The corporate had been dropping prospects, its community was falling behind Jio and Airtel, and its steadiness sheet was below huge stress.
However if you happen to stepped again and regarded on the enterprise, the issues had been truly fairly clear.
Vodafone Thought wanted capital to improve its community, an answer to its huge debt and AGR liabilities, a quicker migration of shoppers from 2G to 4G and 5G, and a better give attention to retaining lively, high-value subscribers.
These issues fed into each other. Vodafone Thought couldn’t make investments as a result of it was dropping cash, nevertheless it was dropping cash as a result of it couldn’t make investments. The longer that continued, the more durable restoration grew to become.
And now, nearly eight years after the Vodafone-Thought merger, one thing fascinating is occurring. The corporate has began addressing nearly each a type of issues.
Within the quarter ended June 30, 2026, Vodafone Idea‘s income elevated 6% year-on-year to ₹11,689 crore, whereas its web loss fell considerably to ₹3,754 crore from ₹6,608 crore a yr earlier. Its Common Income Per Consumer (ARPU) has efficiently climbed to ₹177, and, maybe most significantly, its total subscriber base increased for the very first time because the 2018 merger. The corporate can be presently investing closely in its 4G and 5G community once more. Its latest inclusion within the Nifty Subsequent 50 index provides one other fascinating market sign that buyers are starting to deal with Vodafone Thought as an organization with a viable future somewhat than merely a distressed firm attempting to outlive.
So, did Vodafone Thought lastly determine learn how to revive itself?
Effectively, the reply to this query is much more nuanced than a easy ‘Sure’ or ‘No’.
The corporate continues to be dropping cash, however income is now rising quicker than working prices. That issues as a result of telecom is a scale enterprise. As soon as the community is constructed, serving one other buyer doesn’t require one other whole community, so increased income can finally translate right into a disproportionately bigger enchancment in earnings.
However the revenue assertion solely is smart after we have a look at the steadiness sheet. Vodafone Thought’s greatest downside was that it had little or no monetary flexibility. It couldn’t elevate cash simply, had huge financial institution obligations and confronted the chance that statutory funds would devour the money wanted to maintain the enterprise working. That has now modified. Its excellent financial institution debt fell to about ₹211 crore as of June 30, 2026, from ₹1,926 crore a yr earlier, leaving operational web debt at round ₹3,489 crore. The advance has additionally restored lender confidence, with CRISIL assigning the corporate an A- Stable ranking in Could.
Following this, Vodafone Thought is actively negotiating a ₹25,000 crore funded facility with a banking consortium led by the State Financial institution of India, alongside an extra ₹10,000 crore non-funded facility. The corporate has additionally maintained its bold goal of spending roughly ₹45,000 crore on community capital expenditure over the following three years.
However there was one other downside that had been hanging over Vodafone Thought for years: AGR dues. Telecom firms pay the federal government licence charges and spectrum expenses based mostly on their Adjusted Gross Income, or AGR. The dispute was over what ought to truly rely as AGR. Telecom firms argued that solely income from telecom companies ought to be included, whereas the federal government argued that AGR must also embody non-telecom revenue, comparable to income from investments, curiosity and different sources of revenue. In 2019, the Supreme Courtroom sided with the federal government, leaving Vodafone Thought with a legal responsibility that threatened to devour the money it wanted to maintain investing in its community.
The second a part of the turnaround is its statutory liabilities. AGR (Adjusted Gross Income) was one of many greatest causes buyers doubted Vodafone Thought might get better. Even when the working enterprise improved, a big statutory cost might nonetheless drain the money wanted to fund that restoration. The Division of Telecommunications has now reassessed its AGR dues at ₹64,046 crore as of December 31, 2025, down from ₹87,695 crore. Extra importantly, the cost schedule has been pushed into the long run. Vodafone Thought solely has to pay a minimal of ₹100 crore yearly between FY32 and FY35, with the remaining quantity unfold throughout six equal instalments from FY36 to FY41. The legal responsibility has not disappeared, however the longer schedule provides Vodafone Thought extra room to make use of its working money flows to rebuild its community.
Vodafone Thought has additionally obtained aid in a separate authorized dispute final week. The Bombay Excessive Courtroom quashed the federal government’s retrospective ₹2,113 crore One-Time Spectrum Charge demand, so the disputed quantity will not be a direct money burden.
Now, with its steadiness sheet below much less stress, Vodafone Thought can lastly handle the operational downside that triggered its decline: its community. It spent ₹8,742 crore on capital expenditure in FY26, expanded 4G protection to greater than 87% of the inhabitants and launched 5G in additional than 200 cities. It has additionally signed a roughly ₹30,000 crore network equipment deal with Nokia, Ericsson and Samsung as a part of its bigger three-year funding plan.
Nevertheless, investing within the community is barely half the answer. The larger alternative lies in getting again no less than a few of its prospects misplaced to Jio and Airtel.
Furthermore, it must make its present prospects extra beneficial. A good portion of its subscriber base stays on legacy 2G companies, so transferring these customers to smartphones and 4G or 5G can enhance information utilization and ARPU with out relying totally on tariff hikes. The technique is already displaying outcomes. Blended ARPU has risen to ₹177 now from ₹164 in March 2025, whereas the subscriber base has lastly stopped declining.
Vodafone Thought additionally doesn’t must unfold community funding evenly throughout the nation. Administration says focused investments in circles comparable to Maharashtra, Gujarat, Kerala and Uttar Pradesh East have produced higher buyer acquisition and retention. This helps clarify why the most recent subscriber quantity issues. Vodafone Thought added prospects for the primary time because the 2018 merger. The rise was solely round 3 lakh customers, nowhere close to sufficient to declare a turnaround, nevertheless it adjustments the course of the enterprise after years of decline.
However the headline subscriber quantity hides one other downside. Solely 85.3% of Vodafone Thought’s subscribers are lively, in contrast with 99.24% for Airtel and 98.62% for Jio. In different phrases, roughly 15% of Vi’s reported prospects are dormant, which helps clarify why its ₹195 ARPU nonetheless trails its rivals. So the following problem isn’t just including subscribers, however changing extra of them into lively, higher-value customers.
That is the place we have to be lifelike, although. Vodafone Thought has improved. It has not been mounted. An ARPU of ₹195 continues to be beneath Jio and Airtel, and including roughly 3 lakh subscribers is hardly sufficient to declare victory. The corporate nonetheless must spend closely on its community, whereas Jio and Airtel have a lot stronger steadiness sheets with which to maintain investing. Its three-year community plan is bold, and the corporate wants to extend EBITDA whereas funding that enlargement. The turnaround due to this fact will depend on community funding producing higher prospects and better income, whereas that income finally generates sufficient money to fund the following spherical of funding.
This delicate operational requirement is precisely what makes the present restoration wildly totally different from the short-term monetary reprieves Vodafone Thought has traditionally obtained.
The revenue assertion is starting to replicate these adjustments, with income rising and losses falling by greater than 40%.
That doesn’t imply the turnaround is full. Vodafone Thought nonetheless wants to shut the hole with Jio and Airtel, make investments closely with out exhausting its money and finally generate sufficient free money circulate to cope with its long-term liabilities. However the firm is not trapped in the identical demise spiral that introduced it to the brink of insolvency. It now has the respiratory room to speculate, and the early indicators recommend that funding is enhancing the community, buyer high quality and income.
So maybe Vodafone has all of the elements for a comeback. However the subsequent few quarters will decide whether or not this can be a real turnaround or just Vodafone Thought’s most profitable reprieve but.
Till then…
In case you appreciated this story about Vodafone Thought’s potential turnaround, be at liberty to share this along with your family and friends who nonetheless use VI, and even strangers on WhatsApp, LinkedIn, or X.
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