The September quarter results of Vodafone Idea indicate that the company has experienced a significant decline in investment outlay. Capital expenditure decreased by 28% to 1,750 crore, below analysts’ expectations and less than 2,440 crore in the last quarter. Although the spending was lower, the telecom operator showed better financial indicators.
The net loss narrowed to ₹5,560 crore from ₹6,610 crore in the prior quarter, aided by lower interest costs. Revenue rose 2.4 % year‑on‑year to ₹11,190 crore, while EBITDA increased 3 % to ₹4,690 crore, keeping the margin steady at 41.9 %.
The operator continued to lose subscribers, but the decline slowed significantly. It lost around 1 million users, bringing the subscriber base to 196.7 million, the smallest quarterly drop in more than five years. Average revenue per user (ARPU) rose 1.2 % quarter‑on‑quarter to ₹167, and the company added about 400 thousand 4G subscribers, raising its 4G base to 127.8 million. Data consumption jumped 19 % compared with a year earlier. Business Standard noted that ARPU reached ₹180 for the quarter, up 8.7 % year‑on‑year, although it remains below that of rivals.
Network expansion appears to be slowing alongside the capex reduction. Analysts observed that broadband tower and site additions have declined. As a result, the operator’s 4G population coverage, which stood at 84 %, remains short of its 90 % target. The company said 5G service is now available in 29 cities across 17 circles, and it added more than 1,500 new 4G towers during the quarter.
Brokerage reports tie the decline in capex to funding constraints. Analysts from UBS, JPMorgan and Axis Capital noted that limited access to external finance could hamper Vodafone Idea’s ability to upgrade its network. JPMorgan warned that lower capex can affect network quality and improvements.
Management commentary suggests the company aims to fund near‑term investments through internal accruals; CEO Abhijit Kishore stated that the FY26 capex plans of ₹7,500–8,000 crore would be supported by existing resources rather than fresh borrowing. The operator invested ₹1,750 crore in the second quarter and ₹4,200 crore during the first half of FY26. For longer‑term expansion, however, the company has indicated a need for ₹50,000–55,000 crore over three years to extend 4G and roll out 5G, and is engaged with lenders to secure debt financing.
The reduction in capex has implications for network rollout. The firm has focused on enhancing coverage rather than capacity; it added over 1,500 4G towers and upgraded transmission networks, but the slowdown threatens to leave it behind competitors with deeper pockets. Analysts caution that a weaker network could deter high‑value subscribers and slow ARPU growth. Still, the company sees opportunities in migrating remaining 2G users to 4G and 5G plans, which could support revenue growth despite limited spending.
The possibilities of Vodafone Idea are partly dependent on regulatory decisions. Moreover, potential relief was granted by the Supreme Court of India in October by allowing the government to redefine the adjusted gross revenue (AGR) dues of the operator. The court indicated that the government could rethink and recalculate AGR dues up to FY17.
The operator faces total AGR liabilities of about ₹83,400 crore, with annual payments of roughly ₹18,000 crore scheduled from March 2026. The judgment, which allows the Department of Telecommunications to revisit past demands, has been welcomed by the company and investors. It could pave the way for negotiations on payment terms and help unlock long‑term funding.
Analysts say the market will watch management comments on capital raising and the outcome of discussions with the Department of Telecommunications. UBS maintains a ‘neutral’ rating with a price target around ₹9.7 per share, while JPMorgan and Axis Capital remain cautious. The government’s 49 % stake in Vodafone Idea and its stated interest in sustaining three private telecom operators provide some assurance. Tariff increases and a reduction in competitive intensity could further aid recovery, but both factors depend on industry dynamics.