Vodafone Idea Limited (NSE: IDEA) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Akshaya Moondra — Chief Executive Officer
G.V.A.S. Murthy — Executive VP of Financial Controller – Taxation Head and Chief Financial Officer
Analysts:
Vivekanand Subbaraman — Analyst
Sanjesh Jain — Analyst
Gaurav Malhotra — Analyst
Hemang Khanna — Analyst
Aditya Bansal — Analyst
Piyush Choudhary — Analyst
Presentation:
Operator
. Ladies and gentlemen, good day welcome to Vodafone-Idea Limited Conference Call. Please stay connected. The call will begin shortly. Participants, you have been connected to Vodafone-Idea Limited Conference Call. Please stay connected. The call will begin shortly. Thank you good afternoon, ladies and gentlemen. This is Nirav, the moderator for your conference call. Welcome to the Vodafone-Idea Limited Q3 FY ’25 Earnings Call. For the duration of this presentation, all participant lines will be in the listen-only mode. After the presentation, a question-and-answer session will be conducted. Should you need assistance during the call? Please signal the operator by pressing zero on your touchtone phone. Please note that this conference is being recorded. We have with us today Mr Akshaya Mundra, CEO of Vodafone-Idea Limited; and Mr Murti GVAS, CFO of Vodafone-Idea Limited, along with other key members of the senior management on this call. I want to thank the management team on behalf of all the participants for taking valuable time to be with us. Given that the senior management is on this conference call, participants are requested to focus on key strategic and important questions to make sure that we make-good use of the senior management’s time. I must remind you that the discussion on today’s call may include certain forward-looking statements and must be viewed therefore in conjunction with the risks that the company faces. With this, I now hand the conference call over to Mr Akshaya Mundra. Thank you, and over to you, sir.
Akshaya Moondra — Chief Executive Officer
Thank you, Niro. A very warm welcome to all participants to this earnings call. Yesterday, our Board of Directors adopted the unaudited results for the quarter-ending, 31, 2024. 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 investments and the positive impact of the same and insights on our strategic initiatives. Post this, I will hand over to Moti to share details on the company’s financial performance. Before I move on to company-specific performance, let me share some thoughts on Indian telecom market and growth opportunities. Telecom in India has achieved widespread reach with 4G population coverage at almost 99% and 5G expansion also moving at a fast pace. The demand for connectivity is surging across demographics, driven by diverse income groups, age segments and evolving customer behavior. Technological investments — advancements continue to reshape usage patterns fueling the need for high-speed data and digital services. Between November ’23 and November ’24, the wireless broadband subscriber base grew by about 45 million, reflecting 5% growth. However, despite this impressive growth, overall broadband penetration remains below 65%, representing a significant opportunity for further growth with higher adoption of broadband services. The private mobile operators took a tariff hike in July 2024 after more than two years since last price increase, leading to improvements in ARPU and revenue. However, despite these gains, the industry’s ROC continues to remain low. Further, telecom sector requires significant investments to support emerging technology and the rapid increase in data consumption. Therefore, further tariff increase is necessary to help the industry recover its cost-of-capital and sustain future growth. To maintain affordability and ensure connectivity for all, a pricing model where heavy data users contribute more for higher usage is optimal for the industry. Thank you. Let me also give an update on the bank guarantee waiver. In December 2024, the Department of Telecommunications extended its support to the telecom industry by dispensing with the requirement of bank guarantee to be submitted for spectrum auctions held prior to 2021 reform package with certain conditions. Prior to this reform, BG’s aggregating to INR247.5 billion were required to be provided by the company for respective spectrum installments 13 months prior to each installment falling due. As per the communication received from DoT, no BG is required to be provided for the auctions until 2021, except requirement to provide BG for one year for one-time partial shortfall for the 2015 auction for which we are in discussion with the DoT. Let me now talk about our strategic initiatives. Our first strategic initiative is our focused investment approach. Post fundraise, our capex investments are gathering significant momentum. For Q3 FY ’25, we invested INR32.1 billion, which is more than what we did in first two quarters combined. Bringing the total capex for the first-nine months of FY ’25 to INR53.3 billion. The pace of network rollout is set to accelerate further with the full-year capex expected to be around INR100 billion. During this quarter, we made substantial strides in expanding our network footprint, adding over 4,000 unique broadband towers, the largest quarterly addition since our merger. Our network enhancements efforts included the deployment of 4G on the sub-gigahertz 900 megahertz span across approximately 15,000 sites, improving both coverage and indoor network experience. We also expanded our network capacity by adding approximately 10,400 sites in the 1,800 megahertz and 2100 megahertz bands, which have resulted in faster data speeds of nearly 28%. We are enhancing our infrastructure by deploying high-powered small cells to tackle coverage and capacity challenges in congested areas. These ultra-lean pole sites designed for minimal tech deployment and single operator use are optimized for efficiency with lower operational costs. As of December 31, 2024, our total broadband site count stood at approximately 4,60,300, which includes about 74,800 TDD sites, 13,950 massive MYMO sites and 12,800 small cells. Moreover, we expanded our 4G 900 presence in all 16 priority circles where we have the spectrum. With our investments done so-far in the first-nine months of this financial year, we have added 6,900 broadband towers, including HPSC sites, out of which 5,000 towers were added in this quarter. I must remind you that this is just the start of our larger investment cycle. We plan to take 4G count to approximately 215,000 to 220,000. That is an increase of over 45,000 4G towers since the start of this investment cycle. Our immediate plan is to add another 13,000 towers till middle of next quarter, that is Q1. In the last nine months, we expanded our 4G population coverage by 41 million, reaching a total of 1.07 billion by the end of December ’24 and covering 80% of the population, up from 1.03 billion in March 2024. During this period, our 4G data capacity grew by around 24%, which contributed to an improvement of nearly 28% in 4G speeds. We are on-track to meet our 4G population coverage target of 1.1 billion by March 2025. That is further expand population coverage by 30 million in just three months. Our plan is to finally take it to 1.2 billion, that is 90% population coverage. With these initial investments, which have resulted in higher coverage and better experience for customers in already covered areas, we are witnessing green shoots. I’m pleased to inform all of you that the combined VLR subscriber numbers for December and January are showing positive net-adds in 11 circles. However, we are confident that these trends will improve further as the pace of capex investment increases. Further, the progressive launch of 5G services should improve the subscriber traction. The early result of our network investment is reflected in the latest open signal report, where we emerged as the best 4G network in India. We led across all six experience categories for 4G users, best download speeds, best upload speeds, best video experience, best live video experience, best games experience and best voice app experience. This recognition highlights that we users enjoyed not only the fastest 4G speeds, but also an overall superior quality of experience for various online activities, including video streaming, gaming and voice app calling. We are confident that as we roll-out our 5G network, we will deliver the same superior quality. Building on our extensive network expansion and upgrades, we launched one of India’s most hyper-local marketing campaigns to raise consumer awareness of the significant improvements in-network experience. The campaign focused on showcasing local success stories and emphasizing how our network has become our best-ever network at the city, district and locality levels. Moving on to-market initiatives. Tariff entries implemented in July has contributed to growth in both ARPU and overall revenue. Most impact from this price hike is reflected in Q2 and Q3 FY ’25. As I mentioned in the last earnings call, alongside blended ARPU, we are also sharing a separate KPI that is customer ARPU excluding M2M which provides a clearer trend of mobility business. Customer ARPU excluding M2M has shown a quarter-on-quarter increase of 4.7% and it has increased by almost 13% vers-a-vis Q1 ARPU. Strategic initiatives were taken to reinforce market position through new offerings aligned with consumer preferences in the prepaid segment. The superhero offering launched in our 12 key markets provides unlimited data for 12 hours from 12 midnight to 12 noon in addition to the 2GB daily quota, which is now available to be used in the remaining 12 hours. The non-stop hero offering launched in remaining 10 markets provides unlimited data 24×7. As data consumption continues to grow, especially for consumers without wide broadband access, these propositions aim to enable a worry-free data experience. In the postpaid business, we continue to see improving performance. It is a key focus area for us. And as highlighted in the last quarter, we continue to see increase in our postpaid days on quarter-on-quarter and year-on-year basis. While a larger part of this increase is from M2M segment, we have seen a continuous increase in postpaid consumers over last one year. We are providing optimum range of feature-rich offerings to meet the diverse need of postpaid customers. Recently, we launched EasyPlus, a new innovative proposition for corporate postpaid plans. It offers subscribers an option to select and directly buy additional services like international roaming, OTT subscriptions and data packs for their personal needs on their existing corporate plans. This service is available on the VR and this first-of-its-kind proposition introduces a simplified approach by making it seamless for subscribers to digitally purchase services of their choice on their corporate postpaid plans. This offering complete flexibility and enhancing the overall customer experience. We also introduced a new Wii movies and TV Super PAC at rupees INR175, combining data benefits with seamless access to high-quality digital entertainment. With this pack, we prepaid subscribers can access 15 plus OTT platforms, including Sony Lib, Z5, Menorma Max,, PlayFix, and more along with 10GB data. We continue to strengthen our international roaming business by expanding our roaming packs into new markets and adding 10 more countries in the last quarter alone. Today, our roaming packs are available in over 130 countries worldwide. Notably, we remain the only operator offering unlimited data and calls in as many as 29 countries. During the quarter, we extended our Be Someone Sweet campaign to bring people closer and make them feel connected from wherever they may be. We engaged with the younger audiences through the podcast, Be a parent year forward by UA where the central theme of be someone’s was woven into conversations between celebrities and their parents. The interaction with youth was further enhanced through Snapchat with the introduction of these someone’s Wheel lens. We have launched an AI and machine-learning powered spam management solution to protect users from unsolicited and fraudulent messages. With spam messages on the rise, which are often used as gateway to frauds, we spam SMS solution will safeguard customers by identifying and managing unsolicited and potentially harmful text in Real-time. As part of our broader commitment to customer safety and experience, we are continuously working to develop solutions to curb spam, including voice calls to ensure that users are further protected from unsolicited calls. These measures are in addition to various existing solutions and practices, including may being making the mobile app URL simple-to-use for filling spam complaints by enabling automatic pickup of spam content, sender number and date, as well as whitelisting URLs and brand messages. The spam detection system continuously analyzes SMS messages in real-time using machine-learning to identify patterns, recognize suspicious links and tag potential spam as suspected spam. As the system evolves, it adapts to new SPAM trends, improving accuracy and effectiveness. We are also committed to educating customers and empowering them to identify and report phishing attempts, ensuring a secure mobile experience by proactively sharing important security tips and related information. These strategic launches and initiatives reflect our commitment to staying ahead of the curve by understanding and addressing customer needs while driving market innovation. Moving on to business services, we are transforming from a telecom company into a technological driven enterprise, expanding beyond connectivity to offer advanced solutions like, IoT and cloud services. Supported by Vodafone Group’s expertise, we continue to grow through strategic partnerships and expanded service portfolio. We business received several accolades recently, it’s Ready for next campaign for MSMEs was awarded the bronze category by ET brand Equity DigiPlus. Additionally, the V business platform was recognized as best new product launch at the fifth Silver Feather Awards. We also got recognized as leading brand in telecom sector at the Pradesh Awards. The next strategic initiative is driving partnerships and digital revenue streams. As highlighted before, we aims to be a truly integrated digital services provider with a very clear objective of driving higher digital engagement with our consumers and driving monetization through specific streams or by participating in select digital categories. Our stated strategy around this has been to build this through strategic partnerships and bring out most of these offerings on the VAP. VAPP 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 e-sports tournaments, pay utility bills, shop across categories like entertainment, food, shopping and travel or buy almost any OTT subscription and watch over 350 TV channels and it is our constant endeavor to elevate the experience that our app offers to our consumers. We recently enabled the VAP to be used for recharge by all prepaid users even when their data limit gets over to ensure that they can recharge without delay when needed. We have also enabled UPI auto pay for all our prepaid customers to make it convenient so that their services are not disrupted in case they miss their expiry date. It is initiatives like these, which are helping us grow engagement on ViApp and it is showing in consistently improving VAPP ratings on Play Store. As I mentioned in the previous earnings call, we have launched Movies and TV in an all-new avatar for mobile or both Android and iOS as well as for TV across major operating systems. It is an offering mainly for connected TV, wherein our subscribers can buy a subscription plan to get Texas to host of their favorite OTTs like Disney Plus Hotstar, Sony Lift, Z5, Sunnext, just like the way customers buy DTH plans for TV channels. During the quarter, we partnered with Landscape Play, a premium streaming services for Vi Movies and TV app and bundling of Vi movies and TV with our flagship postpaid plans to offer higher-value to our subscribers. Additionally, we have also introduced first episode free feature for all original content on Z5, enabling subscribers to make an informed decision before subscribing. We have a very strong roadmap to build V-Movies and TV as a destination of choice for our consumers when it comes to their TV entertainment. With that, I would like to reiterate that we will continue to have a disproportionate focus to build the digital ecosystem with our partners, enabling a differentiated experience for we users, which will help us drive customer stickiness as well as provide incremental monetization opportunities. Moving on to the other important topic of debt raise, we remain actively engaged with our lenders for tying up debt funding towards the execution of our long-term network expansion. The recent support from government on-bank guarantee has supported these discussions to move forward. So additionally, we have cash and bank balance of INR120.9 billion to be used for ongoing capex. With that, I hand over to Moti, who will share the financial highlights for the quarter.
G.V.A.S. Murthy — Executive VP of Financial Controller – Taxation Head and Chief Financial Officer
Thank you, Akshay. So a warm welcome to each of you. The revenues for the quarter were INR1.2 billion, a year-on-year growth of 4.2%. The EBITDA excluding India’s 116 effects for the quarter was INR24.5 billion, improving by 15% on a Y-o-Y basis. This is the highest quarterly EBITDA since merger and the margin has improved to 22%. The reported EBITDA, including India’s 106 FX was INR47.1 billion as compared to INR43.5 billion in-quarter three FY ’24, a Y-o-Y growth of 8.3%. The reported EBITDA margin improved to 42.4%. Further, the depreciation and amortization expenses and net finance costs for the quarter were INR56.3 billion and INR56.9 billion respectively. Excluding the impact of India’s 116, the depreciation and expenses and net finance costs for the quarter were INR41.6 billion and INR47.5 billion, respectively. The finance cost you know for this quarter has declined in comparison to last quarter, mainly due to the reversal of interest provisions based on certain agreements that we have arrived at with some vendors and also due to some, I mean, foreign-exchange gains. The PAT loss for this quarter was INR66.1 billion. The debt from the banks has reduced by INR52.9 billion during the last one year and is currently at INR23.3 billion at the end-of-quarter three FY ’25 versus INR76.2 billion in-quarter three FY ’24. The cash and bank balance comprising mainly of FEO proceeds to be used for stated objects is INR120.9 billion as of December 31, 2024. With this, I hand over the call to Nirav and open the floor for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you must press star and 2 R&2. Participants are requested to use handsets while asking a question. Ladies and gentlemen we will wait for a moment while the question queue assembles participants, you may press R&1 to ask a question. The first question is from the line of Vivekana from Ambit Capital. Please go-ahead.
Vivekanand Subbaraman
Yeah, hi. Thank you so much for the opportunity. So first question is on the response to your network expansion so-far. Thank you. Thanks, Akshay, for highlighting some markers there, the VLR trends in several circles. So to understand this better, as you are expanding the network, is that helping you in reducing churn, which is currently from — when customers upgrade from 2Q to 4G lose those customers. Is that how it is playing out? Or are you also able to strengthen your gross adds? Because when I look at the 3Q data, it seems like your gross adds don’t seem to have changed much. So in fact, they seem to be flat over the last one year. So help us understand that one point first. And the second question is on the tariffs. So now that the tariff hike impact is in the numbers, when do you think is the right time for the industry to consider one more tariff hike? And how should one think about the tariff structure here on when the next RFI comes? Thank you.
Akshaya Moondra
Okay. Thanks, Vivek for your question. Your first question is relating to network expansion,? And can you just repeat what exactly was the question relating to network expansion?
Vivekanand Subbaraman
So when you did this network expansion, you said that VLR has improved. But when I look at the quarterly data, I see that the gross adds have not increased. It seems like your churn may have come down, but no effect on gross adds. Is that how it’s playing out or how should we think about it?
Akshaya Moondra
I mean the gross adds figure are quite evident. So ultimately, if there is any improvement in subscriber metrics without any change in the gross adds trajectory, then it has to come from the improvement in retention of the subscribers or better-quality of subscribers, which has been our focus for the last few months, the quality of acquisition and whatever can be done in that direction has been a focus area for us. I think I would also want to highlight here that in terms of gross adds, in terms of our share of gross adds, it is much above our customer market-share. So that is an area where we are already doing well. We are able to attract customers. Our challenge has been sometimes to retain them because of the lack of investment, which we have seen for a fairly long period of time. But as we return back to investment and I would like to emphasize that what we have seen until now is just the beginning of the larger investment that we have. Only with the investments which have been incurred and actually if you look at the results in December, January, only probably the rollout under November and part of December would have had any significant impact, which is only 10% of our new rollout of sites. So really speaking, the larger investment has still to happen, but even with this minimal investment and with a fairly wider communication to our customers about the steps we are taking to improve the network, the pace at which we are rolling out, we have started to see early green shoots and which is reflected in the VLR for December and January combined becoming positive in 11 circles, which is a major, major improvement. And I would say we believe as the pace gathers and as the small investment becomes more formidable and when we are doing this larger investment, definitely these trends will improve for the better. We are very confident about this. Your second question was relating to tariffs. You see, it’s like this, in a normal scenario, I would have said that a time gap of one year is ideal between two tariff increases. However, I would add to that, that given the place where the telecom industry in India is today, where the return on capital is whether you take the market-leader or you take anyone else, if nobody is returning their cost-of-capital. And in that scenario, I would say it is fairly justified if it can be faster. It could be nine months also, I would say. So in a normal situation, a 12-month period is ideal to kind of make any changes on tariffs. But given where the industry is today, a faster tariff change is probably a possibility and the need of the art okay.
Vivekanand Subbaraman
Okay. That’s helpful. And you don’t think that the recent regulatory comments on making the voice-only plan more affordable would come in the way of another tariff repair initiative, right?
Akshaya Moondra
No, no. I think let’s say this is what I guess I’ve been saying for the last two, three years that we have moved to a pricing structure where marginal users pay a certain price and then the incremental price which people who use heavily is very low, which is not a structure in any industry generally. So I think it is important that while maintaining the affordability, which has come through the voice and text plans in a manner, we try to say that the people who are using or the consumers who are using more should actually be paying more. I’m not saying that there should not be any benefit if people pay more per unit of consumption or per GB of consumption should be charged less. The concept of telescopic pricing is there in all products and services. However, I think in telecom in India today is very accentuated. And so I keep repeating this that we used to have an ARPUs, which were, let’s say, maybe INR10, INR20 to a range of INR5,000 rupees for many normal consumers without international. Today, almost everybody can fulfill their requirements by buying a plan of INR400, INR500 if you choose to be on prepaid. That is what needs to be addressed. So I don’t think the voice and text plans would come in the way of achieving the objective of tariff increase and tariff rationalization.
Vivekanand Subbaraman
Okay, great. I’ll take-up one last topic, which is very important for investors. That’s on the next 12 months, including the time that after the moratorium when you have to start making payments for spectrum dues and AGR dues that were not deferred. So the question here is, one, what is your dialogue with the government given that it’s now less than a year that you will have to perhaps engage with them and convince them or get them to take shareholding in lieu of the deferred amounts? And secondly, the regular installment also is a fairly large number. So if you could walk us through how you’re thinking about, let’s say, the next 12 to 15 months in terms of cash-in and cash-out in the company. That’ll be great.
Akshaya Moondra
So Vivek, let me put it this way as we have been saying that post the dismissal of the curative petition where the judicial route was closed, we have been actively engaged with the government to find a solution. As far as conversion is concerned, it is a part of the reforms package. And so while I understand it is at the government’s option, but the fact that in the reforms package in 2021, it was provided that the conversion could be done at the government’s option after the moratorium of period of four years, that clearly shows the intent that the government has provided that in the reform package to support the industry where this need arises. So I think that conversion is a part of the reforms package and that should not be a difficulty in the initial period when we are kind of making the investment and improving our cash generation through improvement in performance. In terms of what we were seeking through the curative petition is correction of some of the demands, which would have brought these liabilities down, that has not worked. So we are having a bit of a ballistic engagement with the government. And I think when we are talking about conversion, generally, it is not necessary that it is only the deferred installments, which can be converted. I think the non-deferred installments are also part of that. So I think it is difficult to kind of say what will finally happen, but I would say that the government is very cognizant of the fact that support is required at this time. They have also seen that we have raised equity of INR26,000 crores overall through promoters, FPO, our vendors converting some of their dues in the last 10 months or so. So and for — we have made the investment, we have started the investment cycle, we are seeing positive results coming out of that and government is actually the largest stakeholder in this entire exercise. So they are cognizant of this fact and I am confident that they will find a solution.
Vivekanand Subbaraman
Okay, Akshay. Thank you so much for the elaborate answers. I’ll come back-in the queue for more questions.
Operator
Thank you. Next question is from the line of Sanjaysh Jain from ICICI Securities. Please go-ahead.
Sanjesh Jain
Yeah. Good afternoon,. Our first question on the network operating cost now that we are scaling up the network. This quarter it really didn’t showed up. I believe we did a lot of investment at the fag. How should we look at the network cost going up from here in next few quarters as we expand the network?
Akshaya Moondra
So I would say, and if Moti wants to add anything he can add, basically you should look at that generally speaking, as you roll-out a new site, the cost varies from circle to circle, but a new site energy cost-plus rental is in the ballpark of INR60,000 to INR70,000 rupees per month. And if you then look at, there are lean sites today where the cost structure is much lesser. So really speaking, the growth of network cost is directly proportional to the number of sites that one rolls out. So that can be fairly easily calculated number of sites multiplied by even if you take it a little on the higher side as some other marginal costs may go up somewhere around INR70,000 rupees per site is generally the cost increase, which is linear. I have already in my opening remarks alluded to as to what is it that we have rolled-out and what is it that we are planning to roll-out in the next — by middle of next quarter. So that should give you a fair idea. I think one of the factors which also happens in this cost is that the energy costs are seasonally lower in this quarter. So some of the costs attributable to the higher-cost on account of rollout may have been offset by the saving in energy costs also. And Moti, if you want to add some?
G.V.A.S. Murthy
No, not really. So Sanjay, I think typically you should look at the seasonality in — in consumption the way we have been — I mean the industry has been showing it in particularly for different quarters and for the growth in flights that are coming in, obviously, I think Akshas has told the kind of cost that incur. That’s on a cash basis. On a lease accounting basis, obviously, that will be slightly different. And accordingly, as we have always said, that in the first few quarters where there’s a large site of a — I mean a large count of sites coming up, you know the cost below EBITDA may be slightly higher than what it would be it over the period.
Akshaya Moondra
Yeah. So just to as a disclaimer, my comments were based on cash — accounting basis, not on, which has explained.
Sanjesh Jain
No, no, that’s clear. That’s clear. On the 5G expansion, when should start that will be starting in next quarter or two-quarter down the line, when are we thinking to roll-out 5G and the circles that will be a priority for that?
Akshaya Moondra
And Sanjesh, it looks like we have not seen our press release clearly. We have clearly stated there that Mumbay launch is slated for March and Delhi, Bangalore, Chandigarh and Patna are slated for April. So that is something which is already stated in our press release. So we started this. I think the site rollout is already progressing in Bombay and Delhi. It’s just that you need to get to some kind of a threshold before kind of doing a commercial launch, that is what we are waiting for. So this is already progressing. The launch has started. I think in terms of the other circles and I mean the priority would generally follow the priority circles. We said that Delhi, Bombay and Bangalore were the three metros, which had to be covered first. And of course, then we move on to the more other important cities and where we have a strong position like Gujarat, Maharash,. So those would be the ones next in-line, which we will give guidance, I think somewhere by the time of the next earnings call.
Sanjesh Jain
Very clear. Thanks,. And then last question on the ARPU side, now that the tariff increase is synced in, for next year, assuming there is no tariff hike, how do we see this ARPU growing, say, by premiumization and our postpaid is growing faster than the prepaid. At least postpaid has — right now we are in a positive trajectory. How do we see ARPU growing organically without?
Akshaya Moondra
Yeah. So one thing as was discussed in the last question also that if we are talking about a full year’s time, then I think as I said, nine to 12 months is a time window for a tariff increase. And I would expect that next year’s ARPU growth will also be impacted by a tariff increase, which should happen. So I think that is one. But then what are the other drivers of ARPU increase besides the tariff correction? So I think as will happen in our case is that as our network kind of with the investment starts improving. I would say we today will probably have maybe besides the growth of subscribers, which may not impact the ARPU, but there could be multiple secondary SIMs, which is converted to primary SIMs will result in improvement in ARPU. So that is there. And I mean, this could be significant because if a subscriber is being counted, but it is not a primary SIM for them, they recharge infrequently, that kind of reduces the ARPU, but if they become the primary charges regularly, then the ARPU goes up. And I would say in terms of the delta of ARPU for those subscribers, it can be significant. The others are upgrade of subscribers to higher plans. We are also kind of bundling this with many of the packs, particularly in the postpaid, but those choices are also available in prepaid. So upgrade of subscribers, more bundled offerings, providing higher-value products. And as I said earlier, as a part of the price increase, as for the industry, I would actually want to see the price increase going up somewhat in-line with the consumption and I think that could be another way to say that the ARPUs will go up.
Sanjesh Jain
Got it, got it. One last bookkeeping question. Can you give the breakup of gross debt between the spectrum deals, AGR deals.
Akshaya Moondra
Sorry, what is the breakup between —
G.V.A.S. Murthy
So Sanjay, I think — okay. So I think the AGR news roughly are in the range of about INR7,000 crores. And as for spectrum is concerned, it’s about INR140,000 crores.
Sanjesh Jain
Got it. Got it. And total gross is?
G.V.A.S. Murthy
So therefore, this is not a debt — this is a deferred payment obligation. So the only debt I have is to the banks, which is about INR2,300 crores as we stand at end of December.
Sanjesh Jain
Okay, that’s a bank borrowing what you’re talking about.
G.V.A.S. Murthy
That’s right.
Sanjesh Jain
Yeah. Got it. Got it. That’s it from my side. Thanks for answering those questions and best of luck for the.
Operator
Thank you. Next question is from the line of Gaurom Lodra from Axis Securities. Please go-ahead.
Gaurav Malhotra
Yeah, hi. Thank you for the opportunity. Just have one question. If I just look at the overall opex on a Q-on-Q basis and I see it even on a Y-o-Y the number has not really moved up, but obviously, there is capex being done, we also see marketing activity has sort of started to move-up again. So just wondering when will the sort of opex sort of start flow — following the kind of moves which we are seeing in capex and also maybe the kind of marketing activity which is happening on-the-ground?
Akshaya Moondra
So while Moti will give you a specific response, but I think when you look at it here in year and if you say that network is growing and the costs have not increased, I think it is also a factor of many other efforts and initiatives we are taking to kind of bring down the costs and contain the cost. Normally, we do not talk very much about it and maybe since the rollout has been minimal at this point of time, the initiatives taken otherwise are offsetting to some extent the cost increase. So I would say that is a point about cost management, while we continue — while we are kind of looking and investing now, we have also been very focused on costs and that is an exercise which will continue. But if Motiya wants to give any specific responses.
G.V.A.S. Murthy
I mean, if you see on a YTD basis, last year versus this year, while there are some costs which have increased, you know, say, the employee costs, etc., network cost is again a thing because we’ve conveyed that we have taken certain initiatives with regard to, I mean, consumption, etc. and even in the case of a — I mean, marketing — cost we have said that we have ensured that the content costs have come down. So therefore, all these have given us benefits and we expect these benefits to, you know, I mean, keep going. But having said that from a network cost perspective, given as I answered Sanjay earlier, based on the number of towers that goes up and the way we account for it, obviously, there’ll be some cost coming in as the numbers increase.
Akshaya Moondra
And also in terms of the marketing costs, I think we have kind of contained it right now, but as we reach a point where the network rollout has reached a place where we think that now it is important to communicate to a larger audience through television and all. I think all those would also come. So those costs would also go up where we are kind of doing a lot of communication, but not the expensive kind of communication at this point.
Gaurav Malhotra
Understood. Thank you.
Operator
Thank you. Next question is from the line of Heman Kanna from Nomura. Please go-ahead.
Hemang Khanna
Hi, sir. Thank you for taking my question. My first question relates to the subscriber base. Now that we’re halfway through the quarter and tariff hikes are largely absorbed, could you help understand how subscriber losses are trending now? And has the run-rate improved significantly from the 3rd-quarter run-rate? And my second question is on the debt raise. Could you help us with updates on that on what’s happening with the debt raise? Is there any timeline in-place? And additionally to help us understand this better, what are some roadblocks or the next steps which are present from the debt raise perspective, which are required for us to close the debt raise now.
Akshaya Moondra
Thanks. Okay. So I think on the subscribers, as I had alluded to in the opening remarks and let me repeat that point that our investments, let me just put things in perspective. We started making the equipment capex, which was largely upgrade of capacity and coverage by rolling out 900 megahertz 4G and also deploying more layers of spectrum on existing sites by software upgrades. This was the main activity which we had done between June to September, which kind of gave us capacity, somewhat increased coverage and better indoor experience through rollout of 4G or 900 where it did not exist earlier. We finalized our orders with the vendors in September where we had made the announcement and those deliveries have started coming from end of October. So the large-scale deployment started then in November and December has been a fairly large deployment, which will continue going-forward. So I think this is what is happening. So I think as a result of all these initiatives and also a lot of communication, which I hope is visible to you, we have been able to in December and January as I’ve given, in 11 circles, we have had a positive PLR net-adds, which has happened after a long, long period of time. So definitely, these investments have started to show an impact. And as I mentioned, this is a very small part of our overall capex plan and we believe as the capex grows and particularly the sites, so we — our population coverage has grown from 1.03 billion to about 1.07 billion since April. By the end of this quarter, we expect to get to billion with the ultimate target of going to $1.2 billion. So I think this will keep on happening. But I guess in our case, it is both a question of the network experience and perception because till the time we were not investing or action was not visible on-the-ground, there was this perception that we will probably not invest. When customers are now seeing action on-the-ground investments coming, their experience improving, I think these things will turn-around. And we are very confident that as we keep on continuing this momentum and accelerate the investment, we will see the subscriber metrics improving further. So your second question was relating to debt. See, see it’s like this one of the concerns which happened after the curative petition was dismissed not so much on merits but on a technicality. I think there was a concern whether the government is supportive of the telecom sector and in addressing the issues which were kind of arising out of — in terms of liquidity post the AGR judgment. While the larger engagement with the government is ongoing to find a solution to that, I think the action by the government in waving the bank guarantees is a clear indication from the government that they remain committed to support the telecom sector through reforms as and when required. And I think that has given confidence also to the banks. So I think post that we have restarted the discussions with the banks, discussions are ongoing. However, as I had mentioned before, the banks are also looking at some clarity on the AGR front. Let me repeat again that the projections which we have been working on with the banks did not consider any relief on AGR. But given that it is an important point, they also want to seek some clarity as to what is the final position on the AGR. So these are ongoing discussions. These are progressing and we believe that we should be able to kind of come to a conclusion soon. I will not be able to give you a timeline at this point of time because there are multiple moving parts. You. I hope I have answered both your questions completely.
Hemang Khanna
Sure, sir. Thanks. That is extremely helpful. Thank you.
Operator
Thank you. Next question is from the line of Aditya Bansal from Motilal Oswal. Please go-ahead.
Aditya Bansal
Hi, sir. Thanks for taking my question. My question is around two data points that are quite divergent. One is your postpaid subscriber base has been consistently going up, whereas if I look at data data usage metrics, they are on a declining trend despite of the generous fee data that you mentioned in the opening remarks. So what would explain this divergence? And I may have a follow-up on this.
Akshaya Moondra
Okay, I think our telecom trends generally are determined by prepaid subscribers, postpaid subscribers while being high ARPU, they are not the ones which drive the trends of consumption. So postpaid subscribers are going up. And as I had alluded that which I believe you would have noticed that if you just look at the postpaid subscribers, it’s a mix of M2M and the consumer space, a large part of the overall postpaid increase is coming from M2M, but over the last one year, we have seen a consistent growth in postpaid subscribers, but they do not determine the data usage. The large part of it comes from the prepaid subscribers. So that is point number-one. Now in terms of data usage, we have seen a bit of a decline, which was happening, but I’m happy to say that with whatever initiatives we have taken, we have seen a growth happening in January over December, and we expect this month-on-month growth to continue in the coming two months also. So there has been a period where of course the important metrics is the data usage per sub and that is the one I’m referring to not really the overall data usage, but in January, we have seen an overall improvement in the data consumption usage, not the data per sub a.
Aditya Bansal
Sure. Would it be possible to share the quantum of subscribers who are using less than 1GB a month-on year network? Just wanted to assess potential impact from any downtrading to the voice-only accounts, would that be possible?
Akshaya Moondra
No, so I don’t have that data, but let me just tell you, we have been looking at and of course, maybe it is not the right time to draw any conclusions, but there has not been so much movement towards that. And my personal opinion is that today the market has evolved to a point where people are wanting — everybody wants on data. So let’s say even if you were consuming 200 MB of data a month, you cannot move to a voice and text plant. You are saying how many people consume less than one GB. I’m saying even if I’m consuming 100 MB, I would need a data plan. Also the differential between the voice and text plan and ULB is marginal. So anybody who wants to use, so I don’t think given the price differential between the two, there is so much of scope for downtrading. And in any case for people who have minimal data users or even you need the comfort of having a data plan without any usage also, if you’re just paying some INR20 extra per month, I don’t think it is very much. So I don’t see much of a risk there, although it just — this is just early days and we’ll have to see how this evolves.
Aditya Bansal
Sure. Thank you.
Operator
Thank you very much. Participants, you may press R&1 to ask a question. Next question is from the line of Rishah from HSBC. Please go-ahead.
Piyush Choudhary
Hey, hi, management. Thank you for the opportunity. Can you remind us on the amount of payables due in FY ’26 and FY ’27 and what is the split there between AGR and spectrum liabilities?
G.V.A.S. Murthy
Yeah. So okay, on the AGR liability, the installment annually after the monitoring period is roughly about INR16,000 INR1,000 crores, yeah. And you know, as far as the spectrum is concerned, that would be roughly about —
Akshaya Moondra
So actually FY ’26, the installment would be less, so the AGR remains the same for FY ’26 and ’27, which is about INR26,000 crores. I think the spectrum installment in FY ’27 is about INR12,000 crores, is that right? Yeah. And in FY ’27, it will be more like 27 26 97,000.
Piyush Choudhary
Thank you.
Operator
Thank you. A reminder to all the participants, you may please start in one to ask a question. Next follow-up question is from the line of Vivekaran from Ambit Capital. Please go-ahead.
Vivekanand Subbaraman
Hi, thanks for the follow-up opportunity. So my question is on the users — users on the network, you mentioned that as soon as the tariff hike happened, there was some knee-jerk migration to BSNL. Have those customers started returning now that the 90-day cooling off period is over? That’s one. Secondly, as you chart out your 5G rollout plan, would it be possible for you to disclose how many 5G users are there on the network? Because those are on the — on the subscribers. Now, Pakshay, you mentioned in your answer to my prior question that you’re also engaging with the government to convert some of the non-deferred loans into equity. So what is your ask from the government at this stage? Do you need more time to pay or do you want to get the government to convert more amounts of spectrum dues into equity? Could you explain that? Thanks.
Akshaya Moondra
So Vivek, let me answer or you may say not answer your last question is that is something I think it’s a wider engagement with the government and I think it would not be right on my part to get into any further details besides what I’ve already explained to you. In terms of the impact of BSNL, the impact has completely reversed. And I think if I just look at June versus what is happening currently, the net port hints from BSNL has increased from June to January as far as we are concerned, although in the interim, there has been a period of loss. Now there are some subscribers who have preferred to stay there. It’s not that everyone is coming back, but I think the gains which BSNL had is reversed and I think more than reversed. And if the net put in from BSNL has increased from June to January, it is basically some reversal which is happening. We have not tracked it at a subscriber level really. The other thing which I can also tell you is that as far as the M&P is concerned, again compared from June till today, our net port-outs have reduced significantly. There has been a significant improvement over the last six months, which is also a reflection of one of the improving metrices.
Vivekanand Subbaraman
Okay. I had actually asked about the 5G user count also if it is handy.
Akshaya Moondra
So I will not be able to give you exact data, but what I can say is that the 5G devices, even though our number of subscribers has been declining, but within that declining base, the number of 5G devices on our network is constantly increasing. And if that is happening, while we currently do not have any offering of 5G as we start rolling out 5G in the main cities to start with, I’m sure that number will go at a faster rate. But at this point of time, we are seeing constant increase in the number of 5G devices on our network.
Vivekanand Subbaraman
So just one small feedback, the other two operators are disclosing the 5G devices on their network, it would be great if you can do that also.
Akshaya Moondra
Yeah, the other two competitors also have 5G network. So we’ll take that feedback and start reporting at an appropriate time.
Vivekanand Subbaraman
I have one last, if I am permitted, I will ask that. Would you be able to give the FY ’26 capex guidance?
Akshaya Moondra
No, I think that we’ll be able to give at the time of the next earnings call.
Vivekanand Subbaraman
Okay. Thank you so much and all the very best. Thank you.
Operator
Thanks. Thank you very much, ladies and gentlemen, due to time constraint, that will be the last question. I’ll now hand the conference back to Mr Akshaya Mundra for closing comments.
Akshaya Moondra
Thank you very much, Nirav. As alluded in my opening remarks with our initial investments, which have resulted in higher coverage and better experience for customers in already covered areas, we are witnessing green shoots. It is reflecting in the combined VLR subscriber numbers for December and January showing positive net-adds in 11 circles. 5G is also underway in our key geographies. With our intensifying investments, we are very confident of further improvement in both operational and financial performance. 2025 is an important year for VIL as the company is taking critical steps in its transformation journey. Including the recent equity infusion by Vodafone Group, we have raised INR260 billion of equity in the last 10 months. The bank guarantee waiver from government has showed their support to the industry. We are working towards closure of debt funding for the execution of our long-term network expansion plan. Thank you all for joining this call and have a good day.
Operator
Thank you very much. On behalf of Idea Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.