In the second quarter of fiscal year 2025-26 (Q2 FY26), Vodafone Idea Ltd (Vi) reported a consolidated net loss of ₹5,524.2 crore, a significant improvement from the ₹7,175.9 crore loss in the same quarter a year ago. Sequentially, the loss has also narrowed from ₹6,611.1 crore in Q1 FY26.
Revenue from operations climbed to ₹11,194.7 crore, up 2.4 % year-on-year (YoY) from ₹10,932.2 crore in Q2 FY25.
Key operating metrics also showed improvement:
- Reported EBITDA rose to ₹4,685.1 crore, up from ₹4,549.8 crore a year ago.
- The average revenue per user (ARPU) climbed to ₹180, up 8.7% YoY from ₹166.
Why the Loss Narrowed: Drivers of Improvement
Several factors contributed to the improved results for Vodafone Idea:
1. Higher ARPU and Tariff Discipline
The ARPU rise to ₹180 reflects successful efforts by the company to upgrade users and increase tariffs. This is a positive sign in a market where value migration is key.
2. Controlled Revenue Growth
Though modest, revenue growth of 2.4% YoY shows that Vodafone Idea is stabilising its topline amid competitive pressure and heavy debt burdens.
3. Reduced Finance Cost and Debt Relief
Analysts pointed out that a drop in interest cost (partly thanks to the bank-debt reduction) and one-time vendor settlements helped ease the burden.
4. Network Upgrades and 4G/5G Expansion
Vodafone Idea reported network enhancements, including expanding 4G coverage and deploying 5G in priority circles. Improved service can help slow subscriber erosion and support higher ARPU. mint
The Challenges Still Linger
While the improved numbers are encouraging, the company continues to face structural headwinds.
Subscriber Base Decline
Despite gains in ARPU, the overall subscriber base remains under pressure. The total base stood at 196.7 million — a slight decline as churn remains an issue.
Heavy Legacy Liabilities
Vodafone Idea’s net worth remains negative (over ₹82,460 crore as of September 30, 2025). The company has substantial deferred spectrum and adjusted gross revenue (AGR) obligations exceeding ₹2 lakh crore payable over many years.
Competitive Pressure
In the Indian telecom market, competitors have stronger ARPUs and healthy subscriber gains, placing further pressure on Vodafone Idea’s ability to recover.
Need for Government Support
The company has indicated that its ability to manage liabilities depends on policy clarity and support from the government, especially around AGR and spectrum dues
Why It Matters: Implications for Investors and Industry
For the Company
- The narrowing of loss to ₹5,524 crore is its lowest in 19 quarters, signalling a turning point (though not yet profitability).
- A stronger ARPU and stable margins could provide a firmer foundation for future growth and investment.
- However, the company must convert this momentum into consistent cash flows, service improvements and subscriber retention to truly move forward.
For the Market & Industry
- Investors reacted positively: shares rose more than 6% after the result release. Moneycontrol
- The result shows that even heavily indebted telecom operators can begin to stabilise through tariff discipline, cost control and network investments.
- The broader industry may see tariffs become more ‘value-based’ rather than purely volume based, pushing consolidation and strategic focus.
For Consumers
- Upgrades and network improvements may benefit users—better 4G/5G coverage, potentially better service quality.
- However, tariff increases needed to boost ARPU may raise consumer bills.
Outlook: What To Watch Next
- Quarterly performance: Will Vodafone Idea sustain ARPU growth and revenue momentum in the next quarters?
- Subscriber trends: Can the company stop or reverse subscriber losses, especially among higher-value users?
- Debt repayment and cash flows: With large legacy liabilities, improving free cash flow and securing refinancing will be critical.
- Regulatory developments: Decisions around AGR and spectrum dues will be pivotal for long-term viability.
- Competitive dynamics: Monitoring how Vodafone Idea keeps pace with rivals in service, 5G roll-out, and customer experience.
Final Word
The latest results mark a notable improvement for Vodafone Idea: narrowing its Q2 loss to ₹5,524 crore amid revenue growth and ARPU gains. The company appears to be crawling its way back from deep losses, but the journey is far from over. With heavy debt, challenging competition and regulatory uncertainties, Vodafone Idea‘s ability to convert improvement into sustained profitability will determine whether this is a genuine turnaround or merely a temporary respite.
