Vodafone Idea Raises ₹6,400 Cr As Lender Talks Progress On Capex Plan

Vodafone Idea is holding advanced talks with three separate groups of lenders to raise funds for its network expansion plans, chief executive Abhijit Kishore said, as per reports.

The debt-laden telecom operator has already secured an initial tranche of ₹6,400 crore and placed equipment orders worth roughly ₹9,000 crore as it works to speed up its capital expenditure.

The company is engaging with a consortium of public sector banks led by State Bank of India, a set of Indian private lenders and foreign banks through external commercial borrowings, Kishore said during Vodafone Idea's Q1 FY27 earnings call. This three-pronged funding structure is meant to support the operator's ₹45,000 crore three-year capex plan.

"We remain meaningfully engaged with our lenders across these three cohorts and have made substantial progress with them," Kishore said. The funds raised so far include ₹1,183 crore from warrant proceeds, along with debt and non-funded facilities sourced through ECBs and private banks. Kishore added that the company remains hopeful of concluding talks with the SBI-led consortium while continuing discussions on other funding channels.

Vodafone Idea has placed capex orders worth about ₹9,000 crore with vendors including Ericsson, Nokia and Samsung, with supplies and execution already underway, Kishore said. He said the company plans to deploy these orders over the next one to two quarters, expanding its 4G network at a pace of roughly 3,500 additional sites every month. The operator spent ₹1,930 crore on capex during the June quarter, a period in which supply-chain constraints limited the pace of deployment.

Over the past year, Vodafone Idea has added more than 15,600 network sites, pushing its pan-India 4G coverage to 87%. Its 5G network now spans over 16,000 sites across more than 200 cities, and the company intends to extend 5G coverage to another 200-plus cities over the coming two quarters.

Subscriber Base And Revenue Metrics

The company reported early signs of a turnaround in its subscriber numbers, adding customers for the first time since its 2018 merger. Its total subscriber base rose to 193.1 million by the end of June, while churn fell by 24 basis points year-on-year. Of this, the 4G and 5G subscriber base stood at 130.1 million, with data usage per such customer climbing 25.2% year-on-year to 21.7 GB.

Average revenue per user (ARPU) increased 10.2% year-on-year to ₹195 during the June quarter, while overall revenue rose 6% to ₹11,689 crore. Cash EBITDA grew 13.5% to ₹2,475 crore over the same period.

Kishore attributed the ARPU growth to customers upgrading themselves rather than tariff hikes, citing three trends: users moving from 2G to 4G or 5G, voice-only users shifting to data plans, and customers upgrading from limited data packs to unlimited ones. "A premiumisation happens when the customer keeps upgrading themselves," he said, noting that a 2G-to-4G shift alone can push ARPU to around ₹230-240, while moving from a capped 1.5 GB daily plan to an unlimited one can add ₹30-35. Around 34% of the company's user base is still on 2G, leaving room for further upgrades.

Chief financial officer Tejas Mehta said Vodafone Idea's cash and bank balance stood at ₹6,558 crore at the end of June, with total net debt at ₹3,489 crore, comprising ₹211 crore in bank debt and ₹3,300 crore in non-convertible debenture borrowings. Mehta said the company continues to prioritise debt over equity funding at this stage, citing available headroom as an infrastructure company.