Is Vodafone Idea finally making a comeback

**Shrehith Karkera** (0:01)
Hello folks, you're tuned in to Finshots Daily. In today's episode, we explore whether Vodafone Idea has finally done enough to reverse its long-standing cycle of decline.
But here's a quick side note before we begin. We'll be taking a publishing off tomorrow on account of Independence Day. But don't worry, we'll send you a quick wrap up in our Sunday newsletter along with the weekly quiz and quiz stoppers. Well, if you haven't subscribed to Finshots Newsletter, then do so. And see you in the sunny side up. And yes, folks, happy Independence Day.
Now, let's get on to today's story.
When I interviewed for Finshots with our co-founder, Shreet, we had an extensive conversation about all sorts of things, right? From the stock market and interest rates to government policy and the broader economy. But one conversation has stayed with me. We actually spent quite a bit of time talking about Vodafone Idea and whether the company could ever make a comeback. You see, at the time, the answer seemed far from obvious. The company had been losing customers, its network was falling behind GEO and Airtel, and its balance sheet was under enormous pressure. But if you step back and looked at the business, the problems were actually quite clear. Vodafone Idea needed capital to upgrade its network, a solution to its enormous debt and AGR liabilities, faster migration of customers from 2G to 4G and 5G, and a greater focus on retaining active, high-value subscribers. Now, these problems fed into one another. Vodafone Idea could not invest because it was losing money, but it was losing money because it could not invest. Get that? The longer that continued, the harder recovery became. Now, almost 8 years after Vodafone Idea merger, something interesting is happening. The company has started addressing almost every one of those problems. In the quarter ended June 30th, 2026, Vodafone Idea's revenue increased 6% year-on-year to 11,689 crore rupees, while its net loss fell significantly to 3,754 crore rupees from 6,608 crore rupees a year earlier. Its average revenue per user has successfully climbed to 195 rupees, and perhaps most importantly, its overall subscriber base increased for the very first time since the 2018 merger. The company is also currently investing heavily in its 4G and 5G network again. Its recent inclusion in the Nifty Next 50 index adds another interesting market signal where investors are beginning to treat Vodafone Idea as a company with a viable future rather than simply a distressed company trying to survive. So did Vodafone Idea finally figure out how to revive itself? Well, the answer to this question is a lot more nuanced than a simple yes or no. The company is still losing money, but revenue is now growing faster than operating costs. That matters because telecom is a scale business. Once the network is built, serving another customer does not require another entire network. So, higher revenue can eventually translate into a disproportionately larger improvement in profits. But the income statement only makes sense when we look at the balance sheet. Vodafone Idea's biggest problem was that it had very little financial flexibility. It could not raise money easily, had massive bank obligations, and face the risk that statutory payments would consume the cash needed to keep the business running. That has now changed. Its outstanding bank debt fell to about 211 crore rupees as of June 30th, 2026, from 1,926 crore rupees a year earlier, leaving operational net debt at around 3,489 crore rupees. The improvement has also restored lender confidence, with CRI SIL assigning the company an A- stable rating in May. Following this, Vodafone Idea is actively negotiating a 25,000 crore rupees funded facility with the Banking Consortium led by the State Bank of India, alongside an additional 1,000 crore rupees non-funded facility. The company has also maintained its ambitious target of spending roughly 45,000 crore rupees on network capital expenditure over the next three years. But there was another problem that had been hanging over Vodafone Idea for years. AGR dues. Telecom companies pay the government license fees and spectrum charges based on their adjusted gross revenue or AGR. The dispute was over what should actually count as AGR. Telecom companies argued that only revenue from telecom services should be included while the government took a broader view. In 2019, the Supreme Court sided with the government, leaving Vodafone Idea with a massive liability that threatened to consume the cash it needed to keep investing in its network. The second part of the turnaround is its statutory liabilities. AGR was one of the biggest reasons investors doubted Vodafone Idea could recover. Even if the operating business improved, a large statutory payment could still drain the cash needed to fund that recovery. The Department of Telecommunications has now reassessed its AGR dues at 64,046 crore rupees as of December 31, 2025, down from 87,695 crore rupees.