Vodafone Idea Q2 FY26 Results: Narrowing Losses and ARPU Surge Signal Glimmers of Hope in a Tough Market

In the cutthroat world of Indian telecom, where giants like Reliance Jio and Bharti Airtel dominate with aggressive pricing and rapid 5G rollouts, Vodafone Idea (Vi) has long been the underdog fighting for survival. Today, the company released its Q2 FY26 results (July-September 2025), painting a picture of modest progress amid persistent headwinds. While the net loss narrowed year-over-year, revenue growth remained tepid, and the path to profitability feels as winding as ever. But with ARPU climbing to new heights and a stabilizing subscriber base, is Vi finally turning the corner? Let's dive into the numbers, the story behind them, and what it all means for the future.



Financial Snapshot: Incremental Wins, But No Home Run

Vodafone Idea's Q2 results show a company that's tightening its belt and squeezing more value from its existing customers, but the elephant in the room—massive debt and AGR (Adjusted Gross Revenue) dues—continues to weigh heavy.

Here's a quick breakdown of the key financials:

MetricQ2 FY26Q2 FY25YoY ChangeQ1 FY26QoQ Change
Revenue from Operations₹11,194 crore₹10,932 crore+2.4%₹11,020 crore (approx.)+1.6%
EBITDA₹4,685 crore₹4,550 crore+3.0%₹4,560 crore (approx.)+2.7%
EBITDA Margin41.9%41.6%+30 bps41.4%+50 bps
Cash EBITDA (pre-Ind AS 116)₹2,246 crore₹2,324 crore-3.3%N/AN/A
Net Loss₹5,524 crore₹7,176 crore-23.0% (narrowed)₹6,200 crore (approx.)-10.9% (narrowed)
Capex₹1,750 croreN/AN/A₹2,450 crore-28.6%

Sources: Company filings and analyst estimates compiled from recent reports.

The headline is the narrowed net loss of ₹5,524 crore, a significant improvement from the ₹7,176 crore bloodbath a year ago. This was driven by better operational leverage and a slight uptick in revenue, but don't pop the champagne yet—it's still a hefty red number, largely fueled by interest expenses on ₹2.3 lakh crore in total liabilities (including spectrum and AGR dues). Revenue inched up 2.4% YoY to ₹11,194 crore, propped up by data usage growth and tariff hikes earlier in the year. However, the sequential growth of just 1.6% suggests momentum is slowing, possibly due to seasonal factors and ongoing subscriber churn.

EBITDA held steady at ₹4,685 crore with a 41.9% margin, edging out last year's 41.6%. This resilience comes from cost controls, including lower interconnection usage charges (IUC) and optimized vendor payments. On the flip side, cash EBITDA dipped slightly YoY, hinting at pressures from lease adjustments under Ind AS 116. Capex moderated to ₹1,750 crore for the quarter (₹4,200 crore for H1 FY26), focused on 4G enhancements rather than the delayed 5G launch— a pragmatic move to preserve cash amid funding crunches.

Operational Engine: ARPU Takes the Wheel, Subscribers Hold Steady

If there's a bright spot, it's in Vi's core operations. The company is finally seeing the fruits of its ARPU (Average Revenue Per User) push, a critical lever in an industry where low tariffs have eroded margins for years.

  • ARPU (ex-M2M): Clocked in at ₹180, up a robust 8.7% YoY from ₹166. This marks the third straight quarter of gains, fueled by subscriber upgrades to higher data plans post the July 2024 tariff revision. Sequentially, it rose ₹3 from Q1's ₹177, showing sustained traction. For context, Vi's ARPU still lags Jio (₹195) and Airtel (₹211), but closing the gap is key to viability.
  • Subscriber Base: Total wireless subscribers stood at 196.7 million, down marginally from 197.7 million in Q1 but stable YoY. The real win? 4G/5G subscribers jumped to 127.8 million, a 1.9 million increase from last year, reflecting successful migrations amid network upgrades. Postpaid users, a higher-ARPU segment, grew modestly, while prepaid churn eased thanks to targeted retention offers.

Data traffic surged 15% YoY, underscoring Vi's relevance in India's digital boom, but voice revenue continues to erode as users shift to over-the-top (OTT) services. Management has hinted at accelerating 5G trials in select circles, but full rollout remains contingent on equity infusion—expected ₹18,000-20,000 crore from promoters and banks by early CY26.

The Bigger Picture: Challenges Loom Large

Vi's results aren't happening in a vacuum. The Indian telecom market is a battlefield:

  • AGR Dues Overhang: With ₹70,000 crore in pending payments to the government, any relief (like the ongoing Supreme Court petition) could be a game-changer. Vi has sought moratoriums and equity conversions, but uncertainty persists.
  • Competition Heat: Jio and Airtel's 5G dominance is siphoning market share, with Vi's overall subscriber pie shrinking to 17.7% (per TRAI). Tariff hikes helped ARPU, but further increases risk alienating price-sensitive users.
  • Funding Squeeze: Bank debt is down to ₹15,300 crore (a positive), but total liabilities exceed ₹2 lakh crore. The company burned ₹2,500 crore in cash from operations last quarter, emphasizing the need for fresh capital.

Analysts remain cautiously optimistic. Brokerages like Motilal Oswal noted the "better-than-expected ARPU trajectory" but flagged subscriber risks. Stock-wise, Vi shares traded flat post-results (around ₹8-9), after a 4% pre-earnings pop on tariff hike buzz. Longer-term, the stock's up 38% in six months, buoyed by revival hopes.

Outlook: Steady Climb or Slippery Slope?

Without direct quotes from today's board meeting (earnings call is tomorrow, November 11), we can infer from patterns: Vi's CEO Akshaya Moondra has previously emphasized "sustainable growth through ARPU and efficiency." Expect commentary on 5G timelines, fundraising progress, and AGR updates. Consensus forecasts point to FY26 revenue of ₹45,000 crore (+4-5% YoY) and losses narrowing to ₹22,000 crore, assuming no major disruptions.

In a nutshell, Q2 FY26 is a "hold the line" quarter for Vi—progress on ARPU and costs, but revenue and subscribers need a turbo boost. For investors, it's a high-risk bet on government support and 5G catch-up. For users, it means more reliable 4G for now, with 5G on the horizon.

What do you think—will Vi bounce back, or is it too late? Drop your thoughts in the comments, and stay tuned for our earnings call recap tomorrow.

Comments

Post a Comment

Popular posts from this blog

Rakuten Symphony and BSNL’s 5G Pilot in India

Image
The telecommunications landscape in India is poised for a transformative leap as Rakuten Symphony, the telecom arm of Japan’s Rakuten Group, has announced a strategic partnership with Bharat Sanchar Nigam Limited (BSNL) to launch a 5G pilot project. This collaboration, revealed during the India Mobile Congress (IMC) 2025, not only strengthens India’s push for indigenous 5G technology but also signals a groundbreaking move to export Indian-made telecom equipment to Japan. Here’s an in-depth exploration of this partnership, its implications, and its role in shaping the future of telecom in India and beyond. Background: Rakuten Symphony and BSNL Rakuten Symphony: A Pioneer in Open RAN Rakuten Symphony, a subsidiary of Rakuten Group, is a global leader in cloud-native, Open Radio Access Network (Open RAN) technology. Unlike traditional telecom networks that rely on proprietary hardware from vendors like Nokia or Ericsson, Open RAN allows operators to mix and match interoperable hardwar...
Read more

Vodafone Idea’s $6 Billion Gamble: TGH’s Potential Lifeline Amid Denial and Supreme Court Hopes

Image
In the high-stakes world of India's telecom arena, where giants like Reliance Jio and Bharti Airtel dominate, Vodafone Idea (Vi) has been fighting for survival. Yesterday's whirlwind of reports, denials, and a Supreme Court twist sent Vi's shares soaring 9%—a rare bright spot for the debt-laden operator. At the center? Rumors of a massive $4-6 billion infusion from US private equity firm Tillman Global Holdings (TGH), potentially reshaping Vi's leadership and fortunes. But with Vi issuing a swift denial and the deal hinging on government leniency for crippling dues, is this a beacon of hope or just another false dawn? Let's unpack the drama, the dollars, and what it means for India's third-largest telco. As of today, Vi's market cap hovers around Rs 63,000 crore, but its balance sheet tells a grimmer tale: over Rs 2.1 lakh crore in total debt, including Rs 84,000 crore in adjusted gross revenue (AGR) and spectrum liabilities. With 5G auctions looming and su...
Read more

Verizon's Bold Spectrum Play: In Talks to Snag EchoStar's AWS-3 Assets for 5G Dominance

Image
In the high-stakes world of U.S. telecommunications, where spectrum is the lifeblood of 5G networks, Verizon Communications is reportedly circling a prime target: EchoStar's prized AWS-3 wireless spectrum licenses. If the deal materializes, it could mark a multi-billion-dollar coup, supercharging Verizon's capacity to deliver blazing-fast 5G services amid fierce rivalry from AT&T and T-Mobile. But what's driving this potential acquisition, and what ripples could it send through the industry? Let's dive deep into the details. The Deal at a Glance Whispers from Bloomberg sources paint a picture of active negotiations between Verizon and EchoStar, focusing on the sale of AWS-3 midband spectrum assets. These talks, described as private and ongoing, emerged just days ago, sending EchoStar's stock soaring in after-hours trading—up as much as 15% on the news. The AWS-3 licenses in question boast a carrying value of nearly $10 billion on EchoStar's books, per rec...
Read more