Vodafone Idea has a Problem That’s Not Going Away

Vodafone Idea Limited (VIL), the third-largest telecom operator in India, is still struggling. Despite all the good which has happened in the recent months, there is still a major problem. This problem has always been there, but it just got hidden behind the fundraising, and government dues reduction developments. Vi, is not adding subscribers. Just understand. The telecom operator is not in the business of raising funds, and neither is it in the business of getting reliefs from the government. The core thing of the telco is to build networks, and add subscribers who continue to use its services. That is what is not happening, and it is something that the market is forgetting.

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Vodafone Idea Total Subscriber Base Grew by Only 0.9 Million Users in an Entire Year

Vodafone Idea saw its total data subscribers grow from 134.1 million in Q4 FY25 to 135 million in Q4 FY26. This means that the telco only added 0.9 million new data subscribers during the entire year. This is after launching 5G, and driving 4G coverage up by millions of in population. There is something which is not going right for Vi at the grassroots level. Airtel and Jio are far too ahead, and this way, it will become impossible for Vi to catch up.

Data subscribers add to the revenues majorly, and they are the ones who drive up average revenue per user (ARPU) with more consumption. However, since this crucial metric is not growing, it would hard for Vi to just sustain on direct tariff hikes to keep improving revenue margins.

Active Subscribers Slide Downwards Fast for Vodafone Idea

Vi released its quarterly performance report, which showed that the active subscribers went down from 175.3 million in Q4 FY25 to 169.3 million in Q4 FY26. While there was a growth in customer ARPU, this shows that the people who actually pay money are going down in number. This is despite adding thousands of broadband sites in the entire year.

Vodafone Idea has elevated its capex levels, and is trying to raise more funds to compete head on with Jio and Airtel. Even the analysts have improved the ratings of the telco in their books and outlook. But Vi is not performing in the area where it needs to – which is adding new customers. The telco’s cashflow issues will not resolve until and unless it can also improve the topline revenues. Vi’s EBITDA is generally lower than Airtel and Jio. This is because Vi has more statutory dues in its books than both operators.

Vodafone Idea Shares have Gone Up

Even though this problem we are talking about persists for Vodafone Idea, the telco’s share price has gone up. This is likely due to the positive developments which took place for Vi in the recent past. The telecom operator has also been getting good outlook from the analysts. However, the telco is unable to raise fresh funds in debt via the banks. Without the bank money, Vi will not be able to immediately to elevate capex flow yet again.

While the promoters have been showing more love to Vodafone Idea than they used to, the banks are still cautious of exposing themselves further. To gain the trust of the banks, Vi has made it a point to clear the bank debt as fast as possible. Despite that the trust is just to that level where the telco could secure funds easily. Vi has maintained that it remains in conversation with the banks for fund raising via debt.

Now it is just a matter of time when this issue (of not adding new data subscribers at a fast enough pace) becomes signficant for Vi and hurts its capabilities to make a comeback.