Vodafone Idea has added subscribers for six months in a row, the first time since its 2018 merger, and is earning more from each customer. Its quarterly loss still widened to ₹5,975 crore. The turnaround is real, but it is only beginning.
For most of the past eight years, the story of Vodafone Idea has been one of decline: customers leaving for Jio and Airtel, mounting losses and questions about survival. Its September-quarter results tell a slightly different story.
Vodafone Idea ended September with 194.4 million subscribers, up from 193.1 million at the end of June. That marks its first six months of net subscriber additions since Vodafone India and Idea Cellular merged in 2018.
For a company that lost millions of customers a quarter for years, that’s a meaningful shift. Its base of 4G and 5G customers, the more valuable ones, rose to 131 million, from 127.8 million a year earlier.
It is also earning more from each user. Customer revenue per user rose 9.7% from a year earlier to ₹198, which the company described as the highest growth in the industry. On a broader “blended” measure, which counts all connections, revenue per user rose to ₹178 from ₹167 a year earlier.
The loss
The headline number is still a loss, and a bigger one. Vodafone Idea lost ₹5,975 crore in the quarter, compared with ₹5,524 crore a year earlier and ₹3,754 crore in the June quarter.
The sequential jump was partly due to an exceptional loss of ₹462 crore, linked to the accounting value of shares set aside for settlements. Underlying operations improved. Revenue rose 6.2% to ₹11,884 crore. EBITDA rose 6.3% to ₹4,981 crore, and cash EBITDA, a measure the company emphasises, rose about 11% to ₹2,498 crore.
The turnaround depends on network investment, and the company is spending. It has placed capital spending orders of more than ₹13,200 crore, of which nearly ₹6,000 crore has been executed, and has raised ₹10,500 crore in the first half of the year. Its 5G service now covers about 400 cities.
Still a gap
Put Vodafone Idea next to its rivals, and the scale of the challenge is clear. Bharti Airtel earns ₹271 per user a month, and Jio ₹218.8. Even on its higher customer measure, Vodafone Idea is about ₹73 behind Airtel (our calculation). Both rivals are profitable, have stronger balance sheets, and are investing heavily in 5G, home broadband and data centres.
Vodafone Idea’s shares closed at ₹12.97 on Thursday, up 0.7%.
For investors, the question is whether the subscriber gains can be sustained while the company closes the investment gap with its rivals. Adding customers is the first step. Turning them into profits, while carrying a heavy debt load, will take time.
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