Vodafone Idea Limited (VIL), the third-largest Indian telecom operator, has recently announced Q1 FY26 results. Things are very interesting here, and at the same time, they are not. Vi’s CEO, Akshaya Moondra said that they saw 90% lower subscriber loss compared to Q2 and Q3 of the last financial year, but that seems like a very focused approach of finding a positive needle in a haystack of negatives. While there’s nothing wrong with that (a company wouldn’t outright come and say we are in a hard position), we need to see what are the challenges that the telco still faces and what doesn’t sit right with the Q1 results.
Vodafone Idea Q1 FY26 Loss Widens Compared to Previous Quarter
Vodafone Idea’s Q1 FY26 loss widened to Rs 6,608 crore compared to Rs 6,432 crore in the previous quarter. This happened despite rising average revenue per user (ARPU) and 4G/5G subscriber base. We will come to ARPU soon enough. The EBITDA margin has fallen from 42.3% to 41.8% QoQ (Quarter on Quarter). The revenues stayed almost flat at Rs 11,022 crore. This is concerning.
Vodafone Idea Sees ARPU Improvement, 4G/5G Susbcriber Base Goes Up
In Q1 FY26, Vodafone Idea saw that its mobile customer ARPU went up to Rs 177 from Rs 175 in the previous quarter. For the last three quarters, the ARPU has shuffled from Rs 173 to Rs 177. This is not good enough, especially when the prices of Vi’s plans are at par with Airtel. Despite that, the telco is barely even registering any ARPU growth. This is concerning too.
Let’s now talk about the 4G/5G subscriber base. The 4G population coverage went up from 82.7% in the previous quarte to 84.1% in Q1 FY26. This is decent, and the total 4G/5G subscriber base increased from 126.4 million to 127.4 million, which is again, barely any growth. To see any material growth in ARPU, Vi needs to increase its 4G/5G subscriber base. For that, the telco is investing in the networks.
However, the ARPU and 4G/5G subscriber growth is not good, and it is definitely a pain for the management, but it needs to be resolved, fast.
Vodafone Idea Blended Churn
Vodafone Idea’s blended churn rate was 4.1% during Q1 FY26, which is the same as the previous quarter. This means the telco didn’t arrest the subscriber loss. The churn rate is still above 4%, despite improving the networks signficantly, meaning something is not working out well for Vi. The average data usage is rising, but that’s likely because of the free 5G data and unlimited 4G data too.
Apart from the blended churn, there’s one more concern and that is active users.
Vodafone Idea’s Active User Base
Vodafone Idea’s active user base fell from 175.3 million in the previous quarter to 172.7 million in Q1 FY26. This is not good. Further, the overall subscriber base is also now below 200 million, at 197.7 million, and it keeps declining. With the problems around raising further money, Vi won’t be able to compete with Airtel and Jio in the network experience department, at least, not any time soon.
One good thing that happened for Vi was an increase of postpaid users from 25.6 million in the previous quarter to 26.6 million in Q1 FY26. But looking at everything, things don’t look good at all for Vi. The telco is now genuinely struggling, and there seems to be no hope for the company from the government for any further help. So what is the major problem?
Is it the communications from the company about the network improvement? We don’t think so, because the communications and updates from Vi about developments are on point and keep coming at regular intervals. Is it jus the network experience, or is it the general sentiment in the market about the company now? Maybe it is none of these, or it’s all of them. The thing is, with the deferred AGR (adjusted gross revenue) payments soon going to be payable, Vi needs a miracle to keep itself afloat.
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