Synopsis: Vodafone Idea’s Q3FY26 results show narrowing losses, with revenue rising 2% to Rs. 11,323 crore and PAT loss reducing to Rs. 5,286 crore. 5G now covers 17 markets, 4G reaches 85.5% of India, and ARPU grows 7.3% to Rs. 186.
The shares of one of the leading telecom service providers in India, engaged in the business of mobility and long-distance services, trading of handsets and data cards is now in the spotlight after it jump 2% in today’s trading session following its Q3 results of narrowing losses.
With a market capitalisation of Rs. 1,07,584 cr, the shares of Vodafone Idea Ltd are currently trading at Rs. 9.93 per share, increasing 2% in today’s market session, making a high of Rs. 10.05, up from its previous close of Rs. 9.84 per share.
Vodafone Idea’s AGR Legal Battle and Financial Strain
Vodafone Idea (Vi) is facing major legal and financial challenges following the Supreme Court’s 2019 ruling on Adjusted Gross Revenue (AGR). AGR is the revenue figure used to calculate licence fees and spectrum usage charges and includes income from both telecom and non-telecom activities.
Vi has been the worst affected, with AGR liabilities of over Rs. 87,000 crore. While the government has not waived any dues, it has deferred and restructured payments to ease cash-flow pressure, with any possible relief dependent on the outcome of the ongoing Department of Telecommunications (DoT) internal review.
In 2019, following the Supreme Court’s October ruling on AGR, Vodafone Idea’s (Vi) liability was estimated by the DoT at around Rs. 58,254 crore, while the company had self-assessed only about Rs. 21,533 crore, highlighting a major dispute. Across the telecom sector, total AGR dues stood at roughly Rs. 1.47 lakh crore, including licence fees and spectrum usage charges.
Relief of AGR Dues
Vodafone Idea confirmed that the government has frozen its adjusted gross revenue (AGR) dues, providing significant relief to the debt-laden telecom operator. In an exchange filing, the company stated it will begin paying a maximum of Rs. 124 crore annually over the next six years, from March 2026 to March 2031, followed by Rs. 100 crore every year from March 2032 to March 2035.
The clarification comes after reports indicated that the Centre had frozen Vodafone Idea’s AGR liability at Rs. 87,695 crore, covering principal, interest, and interest on penalty for FY 2006-07 to FY 2018-19, and extended the repayment timeline.
The filing also noted that the remaining AGR dues, after a reassessment, will be paid in equal annual instalments over six years, from March 2036 to March 2041. Vodafone Idea said a committee will be constituted by the Department of Telecommunications (DoT) to reassess the AGR dues, with its decision being final.
This relief follows the government’s package freezing AGR dues at Rs. 87,695 crore and allowing repayment over 10 years starting from FY 2031-32. The move comes amid a Supreme Court verdict permitting the government to reassess Vodafone Idea’s AGR dues up to FY 2016-17, enabling recalibration of the company’s long-standing liabilities.
Q3FY26 Results
Revenue from operations grew modestly by 2% from Rs. 11,117 crore to Rs. 11,323 crore. EBITDA increased from Rs. 4,712 crore to Rs. 4,816 crore, with margins broadly stable at 42.5% from 42.4% in Q3FY25.
Operating performance improved as EBIT loss narrowed to Rs. 735 crore from Rs. 916 crore, aided by steady opex control and marginally lower interest costs at Rs. 5,632 crore from Rs. 5,690 crore. Consequently, losses reduced with PAT improving to Rs. 5,286 crore from Rs. 6,609 crore.
On a sequential basis, revenue rose from Rs. 11,195 crore to Rs. 11,323 crore, while EBITDA grew faster at 3% to Rs. 4,816 crore. EBITDA margin expanded meaningfully to 42.5% from 41.9%, indicating operating leverage.
EBIT loss narrowed to Rs. 735 crore from Rs. 882 crore, and PAT loss reduced to Rs. 5,286 crore from Rs. 5,524 crore, despite higher interest and financing costs of Rs. 5,632 crore from Rs. 4,683 crore.
Operational Highlights
Since the company began offering service in Mumbai in March 2025, Vi’s 5G coverage area has exploded. The mobile carrier’s 5G service can now be reached in each of 17 priority geographical markets in which it has been awarded 5G spectrum that generates close to 99% of its revenue. Of the 43 cities across India where Vi has 5G service available, 34 will also receive full district service by the end of this year, including all cities in Kerala.
While expanding 5G service, Vi has also invested in upgrading its fixed broadband network facilities. This quarter alone, Vi added over 6,500 4G towers, bringing its overall number of broadband network facilities to more than 548,000.
As a result of these site additions and equipment upgrades, Vi’s 4G network now reaches out to 85.5% of India’s population, with the added network capacity representing a 43% boost in the amount of data that can be transmitted over Vi’s 4G network, compared with one year ago. With continued investment in both its networks, Vi’s ultimate goal is for its 4G network to reach 95% of the population in the 17 priority geographical markets where it operates.
ARPU Growth
The benefits of Vi’s strategy are being felt by both Vi customers and its business model. In the last year, Vi has been able to increase its average revenue per user (ARPU) to Rs. 186, which represents a 7.3% increase over last year’s ARPU, and its total subscriber base now stands at 192.9 million.
The combined 4G and 5G subscriber base is now at 128.5 million subscribers, an increase from 126 million in the same quarter of last year. There is evidence of strong growth on Vi’s two networks.
Conclusion
Vodafone Idea appears to be on the path to recovery, gradually narrowing its losses while strengthening its network and customer base. The company has gained significant relief on its long-standing AGR liabilities, giving it room to focus on growth and operational improvements. With its 5G rollout expanding rapidly and its broadband network continuously upgraded, Vi is positioning itself for a stronger future and could potentially return to profitability if current trends continue.
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