Vodafone Idea Limited (NSE: IDEA) Q1 2026 Earnings Call dated Aug. 18, 2025
Corporate Participants:
Unidentified Speaker
Akshaya Moondra — Chief Executive Officer
Abhijit Kishore — Chief Operating Officer
Murthy GVAS — Chief Financial Officer
Analysts:
Unidentified Participant
Vivekanand S — Analyst
Sanjesh Jain — Analyst
Hemang Kotadia — Analyst
Mitul Jani — Analyst
Vivekanand S — Analyst
Piyush Choudhary — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Vodafone Idea Limited Q1FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Akshay Mundra, CEO of Vodafone Idea. Thank you. And over to you Mr. Mundra.
Akshaya Moondra — Chief Executive Officer
Thank you Renju. A very warm welcome to all participants to this earnings call. Last week our Board of Directors adopted the unaudited results for the quarter ending June 30, 2025. All the results related documents are available on our website and I hope you had a chance to go through the same Let me provide key highlights for the quarter, progress on our investment and its positive impact, along with the update on our key strategic initiatives. Before I move on to company specific performance, let me share some thoughts on Indian telecom market and growth opportunities the 1st of July marks 10 years of the Digital India mission, a decade of transformative growth and empowerment.
The aim was simple to use technology to make life easier for every Indian. India’s journey under the Digital India mission has been significantly fueled by the telecom sector, which has laid the foundational digital infrastructure across the length and breadth of the country. As a telecom company, we have a firsthand view of how widespread wireless broadband coverage has empowered millions of bringing seamless Internet access to remote villages, enabling e governance and enhancing digital literacy. Additionally, robust spectrum investments, expanding fiber connectivity and multiple other factors have together transformed India into one of the world’s largest and fastest growing digital economies.
According to The State of India’s Digital Economy Report 2024 released by ICRIER, India now ranks third in the world for digitalization of the economy. By 2030, India’s digital economy is projected to contribute nearly one fifth of the overall country’s economy. The telecom industry is not only connecting people, but also serving as a backbone for national priorities like digital health, online education, fintech inclusion and smart governance. From farmers using mobile apps to get crop updates to students in tier 3 towns attending virtual classrooms, telecom led broadband access is powering an inclusive digital and societal transformation. With collaborative frameworks and sustained innovation, the telecom industry stands as a critical enabler of Digital India, ensuring every citizen, business and institution can participate in and benefit from the country’s digital revolution. The Digital India story is at its core, a story of connectivity and we are Proud to be the backbone that supports this national mission.
Let me now talk about our strategic initiatives. Our first strategic initiative is our focused investment approach. I am glad to inform that Post launch of 5G services in Mumbai in March 25, this quarter has witnessed expansion of our 5G services. Our 5G services are now available in 22 cities across 13 circles. Further expansion to additional key cities across all our 17 priority circles is planned by September 2025. We continue to invest towards expanding our high speed broadband networks, coverage and capacity by adding new 4G sites and upgrading our core and transmission network. In Q1FY26 we invested rupees 24.4 billion in capex.
We added over 4800 new unique 4G towers during the quarter, reinforcing our focus to deliver superior connectivity parallel. Our network densification efforts have also yielded results with A ratio of 2.7x4G sites per 4G location as of June 2025, highest since merger and improved from 2.3x4G sites per 4G Location as of March 2024. We increased our 4G population coverage by 7% to 84% as of June 2025 compared to 77% as of March 2024. During the same period, our 4G data capacity expanded by 36% driving a 24% improvement in 4G speeds. As of June 2025, V’s total broadband site count stood at 516,200.
Additionally, we have also deployed 13,100 massive MIMO sites and more than 12,300 small cells with these initial investments which have resulted in increased coverage and capacity and a result offering better customer experience. The subscriber decline was restricted to just 0.5 million during the quarter, that is 90% lower compared to about 5 million each in Q2 and Q3 of last financial year, marking our strongest performance since merger. We are confident that these trends will improve further as the investment continues. Further, the progressive launch of 5G services will further support the subscriber traction. This capex and network expansion will enable the company to participate in the industry growth with a goal to bridge the digital divide in remote rural and underserved regions.
We announced a strategic collaboration with AST Space Mobile to deliver satellite based mobile broadband to all smartphones. This partnership will enable us to extend our coverage reach in conjunction with AST’s space based cellular system, delivering seamless voice and data access without the need for separate specialized devices. Moving on to market initiatives, our commitment is steadfast in providing more than merely seamless connectivity. We are focused on enriching the digital lifestyles of our consumers through experiences that go further than the usual voice and data services. Our portfolio of digital first offerings for prepaid users gain momentum with a nonstop HERO Plan offering unlimited data 24.7Now active pan India you would recall that we had V guarantee program for 4G and 5G subscribers which provides 130GB of additional data over the year with 10GB delivered every 28 days for 13 cycles.
During this quarter we expanded it to unlimited voice users as well through a 24 days of extra validity distributed over 12 months with 2 day extra validity credited on every unlimited voice recharge at Rupees 199. With these propositions we won an award for the best use of influencers on Instagram at affect for the promotion of Wedata Guarantee and Superhero and non Stop Hero products for postpaid customers. Catering to the growing demand for best in class OTT experience, we have added a Netflix subscription as a fixed recurring benefit to Vmax family plan. Priced at just rupees 871.
The Vmax family plan includes two connections, a primary and a secondary. In this plan we offer the highest data quota in this industry with a massive 120gb monthly data pool shared between the two members. This is the industry’s largest data offering in this price range. Further, we is the only operator that offers unlimited night data and data rollover up to 400gb ensuring a worry free data experience. On the back of these plans, the data traffic has grown by 10.4% year on year at overall level and 11.2% at per 4G subscriber level. The consumer ARPU has shown a year on year increase of 14.9% reaching rupees 177.
The number of 4G subscribers has also reached 127.4 million during the quarter. We have been working on constantly improving our international roaming pack attractiveness for the end consumer. Our roaming packs are now available in 144 countries worldwide versus 129 earlier. I’m very pleased to share that we are the only operator offering truly unlimited data and calls and with 11 countries added to this category, the total count with unlimited data and calls has increased to 40 countries. To further enrich the travel experience, we have partnered with Blue Ribbon Bags, a US based loss baggage concierge service to offer baggage protection for our postpaid international roaming customers.
This initiative aims to enhance the international travel experience by addressing key concerns and providing a comprehensive and worry free international travel experience for we customers at we we are leveraging advanced AI and ML models to proactively detect spam and fraud patterns, safeguarding our customers and ensuring a safer calling experience for them. From January to June this year, our AI engine flagged over 450 million SMSes as spam protecting users before any harm could reach them in an industry first, we have become the first operator to launch a feature that displays the country of origin for incoming international calls.
This feature further enhances our user safety by empowering them to make informed choices before accepting calls. This is also a protection against cyber frauds which we all know are on the rise. We’s creative excellence has also earned industry recognition. We’s Number Raksha campaign aimed at reuniting pilgrims with their loved ones during the Mahakum 2025 won the prestigious Cannes alliance for the Cultural Engagement. Now moving on to our business services, Our ability to serve the enterprise sector is founded on strong, reliable relationships with our clients and the extensive resources of the Vodafone Group. We are transitioning from a conventional telecom provider to a comprehensive tech core, broadening our scope beyond connectivity to deliver sophisticated solutions like hybrid SD, WAN, SIP, IoT, industrial IoT and cloud services.
We are committed to maintaining this momentum by diversifying our offerings and partnering with strategicalize, ensuring that our services are not only highly relevant but also prepared for. The future and impactful for our enterprise clients. One of the major highlights this quarter is the launch of Webusiness CCaaS, our AI powered cloud space contact center. As a service designed to unify customer interactions across channels, webusiness CCaaS brings intelligence and scalability to customer engagement, enabling businesses to deliver consistent and smart conversations in real time. Our partnerships with Genesys and Startelly Underscore are committed to best in class technology in cloud and collaboration. The rollout of Google Workspace with professional services strengthens our proposition for modern workplace solutions. While Google Workspace provides tools like Gmail, Drive documents and Meet, our professional services ensure smooth deployment, data migration, user adoption and post deployment support.
This holistic offering enables enterprises to fully capitalize on their cloud journey and enhance ROI from their collaboration suite. We also advanced our capabilities in enterprise networking through a Strategic Managed Services agreement with Hewlett Picard Enterprise. This collaboration enhances our ability to deliver comprehensive managed wide area LAN and security solutions, positioning us strongly to support Digital first enterprises across varied environments. Our IoT business witnessed landmark progress. We secured a 10 year contract with Genus Power Infrastructure for 5 million smart meter meters. India is one of the largest smart metering win. This is a strong endorsement of our execution capability in critical infrastructure projects.
We also enhanced our ESIM strategy through. A partnership with Airtel, enabling dual SIM functionality to support resilient future ready enterprise deployments. Additionally, our new device management system will enable real time control and lifecycle management across IoT assets, boosting operational efficiency for our clients. On the MSME date 27 June 2025, we launched the 4th edition of MSME ready for next 2025. This is India’s largest digital advisory platform for MSMEs. We also released the MSME Growth Insights Study 2025 which revealed that 76% of small businesses plan to increase investments in cybersecurity. Along with growing interest in cloud automation and digital payment solutions, these efforts enforce our long standing commitment to empowering India’s MSMEs through digital enablement. The company’s leadership in the B2B domain was acknowledged with honors at the ET Trendys Awards and E4M Digital Influencer Awards recognizing its outstanding impact in the MSME and enterprise segments.
We remain committed to accelerating innovation, delivering exceptional value to our customers and driving growth across the enterprise ecosystem. The next strategic initiative is Driving Partnerships and Enhancing Digital Revenue Streams as emphasized in the earlier calls, our aspiration is to become a fully integrated digital services provider with a distinct goal of enhancing digital engagement with consumers and generating revenue through targeted streams. Our articulated strategy regarding this initiative has been to achieve it through strategic partnerships and to offer the majority of these services via the WE App Our Own Platform Our own OTT platform, WE Movies and TV is accessible across all major operating systems on smartphones, smart TVs, laptops, PCs and tablets.
We Movies and TV offers access to 20 plus OTTs through various subscription options to our prepaid and postpaid users. The OTTs available on We Movies and TV include Z5, JioHotStar, SonyLIV, Lionsgate, Fan Coat, Sunnext, Jopal, Malayalam, Manorma, NammaFlix, Playflix and more and over 350 live TV channels. We have recently also introduced Amazon Amex Player with Movies and TV to bring to our consumers the wide range of content Amazon MX Player has in its repertoire. The WE Movies and TV plans are also bundled with loads of data for allowing our consumers to watch the content without worrying about their data getting over the Movies and TV has grown well in terms of adoption and consumption in.
The last 15 months since its launch and our focus is to continue to scale it, ingest more varied content and build distinct features to make it a destination of choice for more and more consumers. As you would know, apart from this VE app is a multi utility app that offers not just end to end telco account management but also allows consumers to play over 100 games, participate in esports tournaments, pay utility bills, shop across categories like entertainment, food, shopping and travel. Our constant endeavor is to elevate the experience that the V App offers and I’m happy to share that we have just rolled out p Finance on WeApp where we are now offering personal loans, fixed deposits and credit cards to our users for loans.
We have entered into a partnership with Aditya Birla Capital. We have a roadmap to use their expertise and our customer intelligence to expand our offerings and offer unmatched value to our consumers. Customers will also be able to make fixed deposits on V App check, choosing from a range of options between banks and NBFCs and get very attractive interest rates on their savings. I urge you to experience the V App, particularly the newly added V Finance and share your feedback. I would like to reiterate that we will continue to have a sharp and disproportionate focus to build the digital ecosystem with our partners, enabling a differentiated experience for WE users. This will help us deliver enhanced customer value as well as provide incremental monetization opportunities.
Moving on to CapEx deployment plans with Q1 CapEx we have now expanded our. 4G population coverage to 84% and with the ongoing CapEx we plan to increase it further as well as expand the 5G coverage to all 17 circles. We remain actively engaged with our lenders for tying up debt funding towards the execution of our long network expansion plan. The recent conversion of spectrum auction dues into equity and the credit rating upgrade have supported these discussions to move forward. Before I conclude my remarks, this is my final earnings call for Vodafone Idea. I would like to take a moment to sincerely thank all of you, our investors, analysts and broader financial community.
My first earnings call with all of you was in July 2008 when I joined as the CFO at Idea Cellular Post that I have had the pleasure of interacting with you on each of these quarterly calls except one quarter in 2014 when I was away for my course at Harvard. It has been a true privilege to lead this company and to share our journey with such a thoughtful and engaged group. Over the years. Your insights, questions and even your challenges have not only kept us sharp, but have also played a meaningful role in shaping our strategic direction.
I’ve learned a great deal from our interactions from one on one meetings to these quarterly calls and I deeply appreciate the trust, the patience and accountability you brought to the table. I’m incredibly proud of what we’ve accomplished as a team given the headwinds of last few years and I’m confident in the strength of our leadership team, our. Strategy and our commitment to delivering long term value. Talking about Abhijit Kishore who takes over as the CEO from tomorrow. He has been the Chief Operating Officer of the company since November 2021. In this role he has created a steady and focused impact on the business and driven operational rigor. Prior to his current role, he was the Chief Enterprise Business Officer where He strengthened the B2B side of Vil’s business and in two prior stints he led our critical markets of Gujarat and Kerala. Abhijit has had three decades of experience in the telecom industry. He is also currently serving as the Chairperson of the Cellular Operator Associations of India and the India Mobile Congress.
I’m sure Vodafone Idea will flourish under his able leadership. Abhijit is here on this call with us. Let me hand over to him for sharing his initial thoughts.
Abhijit Kishore — Chief Operating Officer
Good afternoon everybody. I take this opportunity to thank Akshay. Over the last three years, despite several challenges, Vodafone Idea has remained resilient, competed effectively and made significant progress under his leadership. My appointment in the new role as CEO of Vodafone Idea comes at an exciting time as VIL is on its turnaround journey. As we move forward, our focus remains on driving revenue growth through subscriber addition and effortless customer experience with intense market execution. I look forward to interacting with the analyst and investor community going forward. That I hand over to Murthy who will share the financial highlights for the quarter.
Murthy GVAS — Chief Financial Officer
Thank you Akshay and Abhijit. A warm welcome to each of you. The revenues for the quarter was rupees 1.2 billion registering a growth of 4.9% on a Y on Y basis. The cash EBITDA of rupees 21.8 billion improved by 3.7% on a year. On year basis, the reported EBITDA for the quarter was rupees 46.1 billion as compared to 42 billion in quarter 1 FY25. Depreciation and amortization expenses and net finance costs for the quarter were rupees 54.7 billion and rupees 57.5 billion respectively. Excluding the impact of India’s 116, the depreciation and amortization expense and net finance costs for the quarter were Rupees 39.3 billion and Rupees 46.9 billion respectively.
During the previous quarter, pursuant to the conversion of spectrum dues into equity by the Government of India, the company had derecognized an amount of Rupees 369.5 billion from its deferred payment obligation. The finance cost for the quarter versus the previous quarter has mainly reduced due to the bow. The CAPEX spends for the quarter were rupees 24.4 billion. The company continues to invest in network and will accelerate the broader capex plans that we have been mentioning previously of rupees 500 to 550 billion over three years. Since FY25, once we tie up the bank debt in this regard, we remain engaged with the lenders to secure debt financing.
The debt from banks has further reduced to rupees 19.3 billion as of June 30, 2025. With this, I hand over the call back to Ranju and open the floor to questions.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Vivekanand S with Ambit Capital. Please go ahead.
Vivekanand S
Hello. Thank you so much for the opportunity. I have two questions. The first one is on churn. So it seems that your CHURN levels have moderated from the times that we saw the tariff hike resulting in some subscribers migrating to bsnl. Have these customers returned to the network? And how should we think about CHURN here on because you have now expanded your population coverage for broadband to almost 84%. So I want you to just discuss the interplay between population coverage expansion and churn. And if possible, if you can provide some color on the population coverage in your relevant 17 circles for 4G that will be great.
That’s question one. The second question is on the CAPEX number. So cumulatively since the FPO you have done capex of around 120 billion and you are saying that you are on track to do the 500 to 550 billion capex predicated on funding, but there seems to be some slippage in the CAPEX trajectory. So last quarter you had said some CAPEX under implementation of 50 to 60 billion and it seems that you have done much less than that CAPEX under implementation. So with the current balance sheet and visibility, how far will you go on capex that’s my second question.
Thank you.
Akshaya Moondra
Okay, thanks Vivek. I think on your first question, which is relating to Churn and how do we see this going forward and you had a specific question on bs. So it is difficult to say that. Whether the customers who had gone have come back and all that, but definitely the immediate fallout of the price increase where we saw a significant increase and all operators saw that, a significant increase in loss of subscribers to bsnl, that has turned around. And if we look at the port in port out data which is clearly. Available, that has been turning around I think since January this year. So definitely that is behind us as far as the current trends are concerned in terms of our own CHURN levels, they have been coming down continuously. Sometimes it is difficult to draw an exact correlation between population coverage and churn.
But as you can see that in Q2, of course Q2 was impacted by price increase. But if you look at Q3 of last financial year, our subscriber loss was in the ballpark of 5 million, which reduced to 1.6 million in the previous quarter and which has reduced to 0.5 million in the last reported quarter. So as our population coverage has been increasing, we have seen a continuous improvement in the subscriber metrics, as is visible. I would say that some of the other interventions which have stood still, not played out completely, are that while the 4G coverage was largely done, I would say in the previous quarter, the 5G rollout has started happening from March 25.
Few cities were rolled down in Q1, but a large part of the new cities have been rolled out in end June and July onwards. So that impact is still to kind of reflect in the overall improvement in subscriber metrics. So I think that is another point. And as we continue to invest and all these things also take some time to register, we have, as you’re aware. We’Ve also come with several attractive pricing propositions, particularly the Nonstop Hero which is becoming quite popular. And some of these Nonstop Hero have actually been launched in the current quarter, that is Q2, so those also have to play out. So with all these interventions in place, we are quite confident that our subscriber metrics will continue to improve and all factors of population coverage, 5G rollout, product. Interventions, better customer service, which is also focus area, all these things combined together are letting the subscriber metrics move in the right direction and that will continue. So if I have answered your first question, then I’ll move on to the second one.
Vivekanand S
Yeah, just one follow up here. So you are saying that the Churn is also due to your network not having 5G coverage. Is that, Did I get that correct? And you, you are now saying that with 5G rollout in more and more cities, Churn will come down further. Is that a factor?
Akshaya Moondra
Yeah, you see it’s like this, as we have said in the past that generally speaking, we have not seen a difference in the trend of subscribers who. Are churning out between people who had. 5G devices or not. However, once you start having a particular offering in our network, definitely it creates a positive feedback or positive sense in the customers who are wanting to use 5G or who are particularly looking for 5G. So while we have said earlier that it did not have a significant impact on Churn, as you make these investments, it gives you two benefits. One is of course, people who want to use 5G technology, who have 5G devices, they benefit from it and they are able to use it in many. It has been rolled out in most of the major cities in any circle.
So that is one. Secondly, as we roll out 5G, it is also a means to create more capacity and particularly in congested areas, that kind of while brings in the 5G experience, it also improves the experience on 4G because that gets congested as traffic transfers to 5G. So I think it is difficult to pin down the CHURN performance to a single factor. And as I said, it’s a combination. Of all three factors. Majorly the population coverage, the availability of 5G, the pricing interventions. And of course there’s a lot of execution in the marketplace, which is there. We ourselves find differentials in our different markets. And as we see more and more and we get into more details, sometimes these also turn out to be execution differences or what are we doing? Well in some areas. How can we replicate it in other areas? So as I said, our investments are happening, we are moving in the right direction and the subscriber metrics will continue to improve. Moving on to your second question about CapEx. So I think in the last quarter we had indicated that we are looking at about 50 to 60 billion of CapEx in H1.
We had, I think I had also mentioned that a large part of it should come in Q1, but the 5G rollout has taken a little while and so most of this will be done by this quarter. So that range of 50 to 60 billion which we had indicated for H1, we should meet that target by September 25th. So we are in line with that target. That is pretty much the Capex that we can incur. Out of new funding. As you are aware, currently we also generate some positive cash from operations post servicing of debt. And we will have some capability to incur capex beyond that.
But the larger quantum of capex which is a part of our plan will require new funding to come for which I think we have mentioned is that we are engaged with the banks and also looking at some other sources of funding so that we can maintain the continuity of our CapEx. However, I must add here that with whatever CapEx we have incurred and what we will incur by end of September, we have got to a point where our 4G coverage is very competitive. Where we are present in terms of capacity, utilization, experience, speeds, they are all very good.
And 5G also, wherever we ruled out, we have a very compact offering in terms of speeds or performance. So while we look at a significant round of next capex coming from new funding, it is very clear that what we have already invested puts us in a much better competitive position and we’ll continue to leverage that as we move forward.
Vivekanand S
Okay, Akshay, that’s very helpful. As far as CapEx is concerned, you are saying that the CapEx that is coming out of fundraising in the FPO and other events last year, that will be done by September and then beyond September, you will only spend what you are earning as cash EBITDA. So around 21 billion or 22 billion per quarter. Is that the right way to infer your CAPEX trajectory?
Akshaya Moondra
Broadly, yes. There are other pluses and minuses, but yeah, directionally, yes.
Vivekanand S
Okay, thank you.
Akshaya Moondra
Thanks Vivi.
operator
Thank you. Our next question comes from the line of Sanjay Jain with ICICI Securities. Please go ahead.
Sanjesh Jain
Yeah. Good afternoon. Thanks Akshay for taking the question and best of luck for your needs next journey. And I welcome Abhijit. So my question first, around the 5G subs. I know it’s too early for us to call, but can you help us understand how much percentage of a customer in our coverage area have the 5G phone and how many of them have opted for the subscription? Because I think 5G is only beyond 2GB per day plan. Can you help us with 5G?
Akshaya Moondra
So firstly, I think I will not be able to give you a number of 5G devices.
operator
This is the operator. Am I speaking to Nikhil? Nether? This is the operator. Am I speaking to Nikhil? Neta? This is the investor.
Akshaya Moondra
Point to be understood that in the overall thing, once we have launched 5G, the 5G device share is increasing and our device market share has increased on our network. That is number one. Number two is that we see that wherever we have launched 5G, we have seen 60 to 70% of subscribers who have got a 5G device actually adopting 5G and starting to use it. So that is the other thing. And I think as soon as we kind of have launched and it takes about two months or a little plus minus here and there, where we get to the 60 to 70%, of course our effort is to see how do we get to that balance, 35 or 30% to get to use 5G.
But as you would know that some people are happy with 4G. 5G sometimes results in a higher battery drain, they don’t want to use it. So sometimes it is also driven by the consumer choice. The third point is you said that it is. I think we are offering this on a 299 plan as an introductory offer which is 1gb, which is the. Which is the 1.5gb. So it is not linked to the 2gb plan. Our introductory offers on 5G with unlimited data or on the 299 plan which is 1.5gb per day. Of course, in Mumbai we have withdrawn that introductory offer.
So all these are meant to be introductory offers. And when we find that the introductory offer has served its purpose, currently we have withdrawn in Mumbai and ultimately that’s the plan for the remaining markets. But our introductory offer is at a price point of 299 with 1.5 GB per day.
Sanjesh Jain
Clear. Second question again.
Akshaya Moondra
I saw your good wishes. Sorry, I forgot to mention that.
Sanjesh Jain
Thank you, sir. Second question on the subscriber again, though we have significantly restricted our total subscriber loss. But if I Look at the 4G addition which should have ideally resulted in a better 4G edition, there appears to be a lag between our total loss and the acceleration on 4G. How are we going to fix it and what is causing this lag effect?
Akshaya Moondra
I would not describe it as a lag effect if you see that again, after the price increase, we had lost 4G subscribers which were otherwise increasing till then in the last quarter we added about point in the Last quarter, meaning Q4, we added about 0.4 million 4G subscribers. This quarter we have added 1 million 4G subscribers despite losing 0.5 million on an overall basis. So definitely the 4G trends are better. Than the overall subscriber trends. They are moving better than that and they will continue to do better than that. But yes, post the price increase there was a period of decline and from which over the last two quarters we have seen a positive trend. And an improving positive trend. So I wouldn’t call it that there’s a lag or anything there.
Sanjesh Jain
No, because I think when we were losing 3 million, that is pre tariff increase, we were still able to add a million customer. Right now we are losing just 0.5 million, but our addition run rate remains still a million. I can understand the tariff increase and the consolidation impact had in last few quarters, but I’m just looking at the data before we got into the tariff increase. I think that trend should have accelerated. Right?
Akshaya Moondra
I think acceleration you will have to see largely with reference to what have been the most recent trends. I think whether when we were losing 3 million subscribers, the 4G was increasing by 1 million. I cannot specifically answer that question. But I think we have to look at these as two independent trends, not necessarily correlated with each other. Most important is that are we adding. 4G subscribers, which we are and is that trend improving?
Sanjesh Jain
Got it, got it. Now follow up again on the total subscriber base. So we have broadly added. We went from 1:83,000 sites to now 197. How has been the trend where we haven’t added the capacity in the subscriber versus where we have not added? To understand the benefit where the network is coming, how is the growth panning out? We are, we’re hitting that industry growth rate of 2% in the areas where we are now equal to the peers in terms of 4G coverage.
Akshaya Moondra
So generally the answer to that question is yes. But as I mentioned a little while. Ago, when we look at our different markets, there are differentials and performances. There are markets where we have seen that as we have rolled out new. Sites, there is a rub off effect on the existing network and sites. And so while the revenue is growing on the new sites, it is also growing equally well on the existing sites, which is what really should the result be all the time and which is what our expectation is. We have seen some markets where we are seeing that where we have rolled out new sites, we are seeing an improving performance.
But where we have not made investments in particular geographies within a market, those are not showing the kind of growth. Which some other markets are showing. So I think we are currently at a point of time where we are. Getting into details of seeing what is. Happening in each market, taking corrective actions. And that is how as we look. At because ultimately there’s a significant investment which has been made, we kind of monitor that result of that investment. The results may not be uniform across some places, the invested area and the areas where the existing sites both are showing an equal increase in metrics and revenues, which is what we want it to be. Some markets or some geographies, part of markets. That is not true and that is what we are constantly working to improve upon.
So that’s the point I was making, that we have constantly seen improving subscriber metrics and as we kind of look into these details and take actions in the marketplace in terms of what do we need to do in terms of distribution, what do we do in terms of focusing on different areas where we find there is a gap, we are find constantly improving performances across. So with this round of CapEx, I think 5G will make a significant difference. The recent pricing interventions will make a significant difference. But along with that we also have to see the differential performance as markets take learnings from there and then take. Action so that the collective benefit of investment in a market is felt across the market.
Sanjesh Jain
That’s clear. Now touching upon the CapEx, we earlier mentioned that we are looking at going to a total site of 2:15,000 to 2:20,000. We are at 197 by end of September. Where are we looking at? Are we looking at reaching to 2005, 2000, 5000 and then beyond that I think we will need capital to keep up the pace. Will that be a right assumption to look into it?
Akshaya Moondra
Let’s say in this quarter what we are primarily doing is deploying 5G and redeploying some of the equipment because we’ve had to swap some of the sites where it is more an enhancement of capacity on existing sites. So in this quarter we are not expecting any significant change in the number of sites. It will not be anywhere close to the figure you are mentioning. And any significant increase in the new sites would depend largely on the new funding. But as I said that we will have some cash generation which will be invested and some. So we will see some increase in this quarter.
However, in Q3 and Q4 as we kind of deploy some of our internal cash generation for CapEx, we will see some growth. But to get to a figure of 2:5000 or 2:15,000, we will need bank funding. I mean new funding, not bank funding necessarily new funding.
Sanjesh Jain
Got it. One question on the balance sheet side, I was just looking at the change in the net debt from Q4 to Q1. It’s broadly gone up by. Gone up by 7,000 crore. So we generated broadly 2,200 crores of EBITDA and another other income of 150 crore. And we have spent broadly the same Number in the capex. So what explains this increase in the net debt by 7,000 crore. If you can help us understand the bridge. I know there is some interest accrued but not paid. But that doesn’t completely explain the remaining part.
Murthy GVAS
So Sanjay Murthy here. So if I can just understand your question again. So you’re talking about net debt now net debt, you know an increase that you’re talking about, you know, which is basically gross less of cash, cash and cash equivalent. My understanding is that it is gone up by. By about 3 billion. Right? The gross debt is gone.
Sanjesh Jain
It’s gone up. No, no, not gross debt. I’m talking about net debt. So your cash has also depleted. So your total net debt has gone up by 6900 something crores.
Akshaya Moondra
If I say, I mean rather than looking at net debt let’s look at three parts. One is the bank debt which has. Reduced by from 2.23 billion to 19.
Sanjesh Jain
Yeah, correct, correct.
Akshaya Moondra
So that is one part the government really speaking there is no change. There was a conversion at which time some adjustments were done in terms of accrued interest and all. There is no cash implication of the government debt that exists today. The spectrum payments will all come in this quarter. So there is no payment in Q1 as such. And then there is the cash which. Is largely remaining out of the FPO funding. Now there is a time differential between when the CAPEX is booked in books. And when the payout happens. So it may not always match the cash flow. So I think the easier way to understand this is that you look at the government debt as nothing having changed really very much from the last quarter. Bank debt reduced by 400 crores or 4 billion rupees. And FPO funds largely being used for cash. There could be a time differential between when capex is recorded and when the cash outflow happens. So just look at it three parts independently. Otherwise trying to combine the three then that requires a more offline discussion for clarity.
Murthy GVAS
Yeah, just to add Sanjesh, the spectrum and the AGR debt remains the same as last quarter and the external debt has gone down the cash and cash has gone down on account of UCF capex. So therefore we take a net debt figure. That movement is slightly there as Akshay explained.
Sanjesh Jain
That’s clear. That’s clear. Thanks. Thanks Akshay for all those explanation and Murthy and best of luck for it the coming quarters.
operator
Thank you. Next question comes from the line of Hemang Kotadia with Anil. Please go ahead.
Hemang Kotadia
Yes, good afternoon. Just wanted to ask One of the postpartum gross adds. So what will the broad percentage between the M2M and mobile customer on the addition side and on the second question, what will be the AGR and deferred spectrum liability at the quarter end figure?
Akshaya Moondra
Let me address the postpaid question and the AGR will be answered by Murthy. So I think as far as the postpaid subscribers are concerned we have a growth of about 1 point million quarter on quarter large. Part of this comes from the M2M which is a fast growing stream. But it also has positive additions on the consumer postpaid side. I will not be able to give you the breakup here.
Murthy GVAS
Okay. On. On the Spectrum payout for FY26 it is roughly about to earn
Akshaya Moondra
asking the. Breakup of the outstanding the payment. What was your question? Could you repeat the second question?
Hemang Kotadia
Yes, I’m asking outstanding on June quarter ATR and deferred Spectrum Liability Board.
Murthy GVAS
Oh the outstanding as of end of end of June is about 100 billion for. For deferred payment towards spectrum and about 75. You know, billion for. I mean sorry 75,000 for the AGR. So totaling up to about 195. 195,000 crores.
Hemang Kotadia
Okay, thank you and thank you Mr. For your future.
Akshaya Moondra
Thank you. Thank you.
operator
Thank you. Next question comes from the line of mitul jani with gm enterprises. Please go ahead.
Mitul Jani
Yeah. Good afternoon. Thank you Mr. Mudra for your leadership during your tenure and congratulations to Mr. Kishore for the post. My question is about the government stake. It’s more of a clarification. If the company performs well, would it be feasible and viable for the company to repurchase shares by settling the government stake somewhere in the future?
Akshaya Moondra
I mean let’s say firstly technically a. Company cannot purchase its stake. So it is basically if at all that was to be thought of. It is promoters who have to buy a stake. A company cannot buy back its stake unless you kind of get into a complicated process of reduction of capital. Let me just say. But in reality today we are focused on investing. So whatever capital is available to the company. I think the focus is not in trying to do anything with the government holding which is there. The focus will be in using any funding and cash generation for investments which will give the best returns for the business.
Mitul Jani
Okay. Because the thing is like the dues are not being paid so hence it has been converted. So somewhere down the line if the cash flow is somewhat for a decent pile, pile up in a sense so the company can just adjust for the dues. Which have been like in the equity portion. That’s why.
Akshaya Moondra
I think that’s not a relevant question for today. For future.
Mitul Jani
Okay, fine, fine, fine. Thank you. Thank you, thank you. And all the best with your future endeavors.
Akshaya Moondra
Thank you. Thanks Mitu.
operator
Thank you. Next question comes on the line of Vivekananda S with Ambit Capital. Please go ahead.
Vivekanand S
Hello. Thank you for the opportunity. Akshay, congratulations on the completion of a great term and career in Vodafone idea. Thanks for your service and Abhijit, congratulations and wish you the very best for your assignment. My question, Abhijit, is to you. You have worked in the Vodafone group. You have also handled enterprise roles in the past. So from your vantage point, when you look at the company now and the enterprise business in India, how are you thinking about the ability of Vodafone Idea to leverage on the market opportunity considering the capital constraints that the company faces? And it’s unlikely that the constraints are going to go away or disappear anytime soon.
So would want to understand thoughts on the enterprise side and what your plans would be.
Akshaya Moondra
Before Abhijit answers the question. Let me just thank you for your wishes and then I’ll leave it to Abhijit to answer the question question which you specifically asked.
Abhijit Kishore
Yeah. So thanks. Thanks Vivek for your wishes. You know the way, I’ll kind of keep it brief and obviously I’ll get into a detail probably from the next quarter onwards. But I clearly see an opportunity on the enterprise question since you are asking it specific to the enterprise. And as a said, you know, we have moved in the journey from being a telco to a tech code with the addition of many value added services, which is more relevant to for the enterprise basis, the cloud services side, I see a pretty bullish scenario as far as the enterprise is concerned.
Also for the fact that Vodafone as a group has pretty deep entrenchment as far as the enterprise business is concerned, including the IOT part of the business. So I think it’s a pretty good space to be in and Vodafone Idea will be absolutely participating in the space.
Vivekanand S
Okay. Do you have any kind of target in mind from a revenue contribution or say revenue opportunity perspective in terms of, let’s say revenue pool available to Vodaidr for the next three years, five years and areas that you’re targeting because you enlisted many things in past presentations linked to public, private, cloud, IOT and other forms of communication like SD wan. So is there a target opportunity set in mind given the kind of investment restrictions or constraints you may have.
Abhijit Kishore
So I’ll probably try and explain that in the next one. Vivek, Too early for me to kind of get into the details at this point in time, but we’ll definitely pick it up in the next one and.
Akshaya Moondra
But Vivek, if I can give a kind of broad reply to your question, one is I think many of these businesses are in nascent stages. They are all coming up from a very small base. So I think it is not necessarily that there are internal targets, but I think nothing that I can talk about right now. One thing which we see as which is growing very rapidly right now in the IoT space is the metering deals which I alluded to. And you will see that us and also all operators are adding significant additions to the IoT space, largely driven.
One is of course these boss machines which is growing, but this is a kind of bit of a fluctuating business. But automated metering is something which is picking up also I think as far as enterprise business is concerned there is a direct correlation between investment and returns sometimes. So if you find a good opportunity, I think it is not so much a question of capital constraints which will hinder in any way the growth of the enterprise business. Really enterprise investments can be easily made if there is a clear opportunity. So I think enterprise business we are very focused and it is not constrained by capital which tends to be much smaller compared to the larger mobility business and opportunities in these new revenue streams is quite large.
Some of they pick up at different times as I can say that the automatic metering is picking up at real great speed and others are also picking up and I think you’ll get to hear about it as we progress.
Vivekanand S
Great. Appreciate the color. Thank you and all the best.
operator
Thank you. Next question comes on the line of Piyush Chaudhary with hsbc. Please comment.
Piyush Choudhary
Yeah, hi, thanks a lot for the opportunity and congratulations Akshay and all the best for your next move I have two questions. Firstly on VLR subscriber base which is down 2.6 million quarter on quarter while that was down 1.2 million in the last quarter. Like what’s explaining an acceleration on VLR subscriber being dropping and as a percentage also that number is being trending down. So if you can share any color on this Second question is on the funding. Can you discuss on the progress and key milestones to watch. What are the bottlenecks based on your discussion with banks or any color which you can share over here.
Thank you.
Akshaya Moondra
Okay, on the VLR subscribers I will not be able to give you a very specific reply. All that I can say is that generally Q1 is a seasonally weak quarter. So if you look at historical data from a quarter on quarter variance, Q1 is actually a weaker performance compared to Q4 generally across the industry. In that context, I think the VLR trend may appear to be in a direction sometimes. There is also this challenge about migrant labor moving from one part of the country to another that creates some of these distortions. So I don’t have a specific reply, but I would say that the reported subscribers which we are showing, which are showing a consistent trend of reduction of subscriber loss from 5 million to 1.6 million, 2.5 million, that is representative of the business performance and that should be taken into account in terms of funding.
I think as we have said multiple times we are engaged with banks. Those discussions have again started moving forward once the conversion happened and the credit rating upgrade happened. I think what the banks are currently looking for is some clarity on the AGR front. So that is where we are engaged with the government. Given that the government has made the conversion, they are today the largest stakeholder in the company. Whether as an equity holder or any dues which are owed to any external party, we are quite confident that there will be a solution to agr.
So that is there. Nevertheless, given the fact that we are keen on maintaining a continuity of our capex which has been going on since last year, we are looking at non banking sources of funding also. Not the full amount of 25,000 crores that we have talked about, but a lesser amount so that we can continue with the CAPEX cycle. So banking things are progressing, but they may take a little while and we are trying to look at other sources of funding which could be available in a shorter time frame.
Piyush Choudhary
So in a scenario of delay in any kind of new funding from the bank, the 2 edge network capex could be slower. But like in terms of resolution of, you know, or let’s say the banks, whatever clarity they want on the EGR dues, you feel that by March 2026 those should be resolved. Is that how we should think?
Akshaya Moondra
I think in the past we have always seen that government has been supportive. You look at 2019, deferment of spectrum installments, 2021 reforms package, 2023, conversion of government dues to equity, 2025 again conversion of government dues to equity. Generally these actions have happened. Generally they happen closer to the time when it is essentially needed. Our request to the government has been that let us resolve this earlier than before the deadline of March so that banks get clarity and we can proceed with bank funding. And that is our continuing effort today also.
Piyush Choudhary
Got it. Thank you Akshay.
Akshaya Moondra
Thanks. Thanks Piyush.
operator
Thank you. Ladies and gentlemen, due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to Akshay Mundra for closing comments.
Akshaya Moondra
Thanks Renju. As discussed during the call, our investments have led to improved coverage and enhanced customer experience resulting in best subscriber Metrics. Since merger, 5G services has been expanded to 22 cities in 13 circles and more are underway. Our data usage has increased significantly by 9.4% quarter on fourth quarter showing increased engagement with our subscribers. With all these developments, we are confident of continuing improvement in subscriber metrics which has been demonstrated for the last two quarters. We are also working towards tying up debt funding for the execution of our long term network expansion plan. Thank you all once again for your support and engagement throughout my tenure.
I look forward to watching the company’s continued success, this time from the other side of the call. Thank you very much.
operator
Thank you on behalf of Vodafone Idea Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.