Vodafone Idea Ltd Q1 FY27 Earnings Call: ARPU Hits Industry-High Rs. 195, First Positive Net Adds Since Merger

Vodafone Idea Ltd held its Q1 FY27 earnings call on August 10, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Revenue Crosses Rs.11,600 Cr; First Positive Net Adds Since Merger

• Revenue of Rs.11,689 Cr in Q1 FY26-27, up 6% YoY and 3.2% QoQ, driven by ARPU expansion and improving subscriber mix.
• EBITDA crossed Rs.5,000 Cr for the first time, reaching Rs.5,034 Cr; margin improved 120 bps YoY to 43.1%.
• Cash EBITDA grew 13.5% YoY to Rs.2,475 Cr despite over 15,600 broadband sites added in the prior 12 months.
• Net subscriber additions turned positive for the first time since the merger; total subscriber base reached 193.1 million.
• Churn improved 24 bps YoY; 4G/5G subscriber mix improved to 67.4% (vs. 64.4% in Q1 FY26), with 4G/5G subscribers at 130.1 million.
• Exceptional item of Rs.1,816 Cr recorded from fair value adjustment of ear-marked shares; this re-measurement will occur quarterly.

ARPU at Industry-High Rs.195; Upgrade Cohorts Drive Momentum

• ARPU grew 10.2% YoY to Rs.195 (highest in the industry), marking 20 consecutive quarters of expansion; sequential growth of 2.6% in Q1 FY26-27.
• 66% of customers on smartphones (4G/5G) and 34% on 2G as of Q1 FY26-27; management highlighted a "unique upgrade opportunity" as network rollout progresses.
• ARPU uplift per upgrade cohort: 2G-to-4G/5G delivers Rs.230-240 uplift; multi-SIM to data migration delivers Rs.30-35; data to unlimited upgrades deliver further uplift.
• VLR subscriber decline in Q1 attributed to seasonality (urban-to-rural migration); July 2026 showed improved traction, with no structural issue identified.
• Management expects ~10% organic ARPU growth through mix improvement, targeting blended ARPU above Rs.190.
• Postpaid net additions positive for 6-8 consecutive quarters including Q1 FY26-27; postpaid growth of 1.8 million QoQ was largely offset by 2 million M2M additions (per TRAI data).
• M2M net additions doubled over the past year (FY25-26 vs. FY26-27), driven by automatic meter reading, vehicle tracking, connected cars, and point-of-sale.

Rs.45,000 Cr Capex Plan On Track; 5G Live in 200+ Cities

• Capex of Rs.1,930 Cr deployed in Q1 FY26-27, impacted by supply chain headwinds; three-year capex guidance of Rs.45,000 Cr (FY26-27 to FY28-29) reaffirmed.
• Orders worth Rs.9,000-Rs.9,100 Cr placed to date (Rs.1,930 Cr in Q1), expected to be deployed over the next two quarters.
• 32,000+ 4G sites added over the two years ended Q1 FY26-27 (15,500 in trailing 12 months); current deployment pace of 3,000-3,500 sites per month; pan-India 4G coverage at 87%.
• 5G services live in 200+ cities across all 17 circles, with 16,000+ 5G sites; plans to add 200+ more cities over the next two quarters (by Q3 FY26-27).
• Three-year site rollout guidance: ~55,000-57,000 4G sites and 86,000-90,000 5G sites; 4G rollout expected within 18 months (by end of FY27-28), 5G may extend into FY27-28.
• New partnerships signed: Spotify (postpaid V-Max), PhysicsWallah (prepaid Vi Edu Plus), Meta (silent mobile verification); Vi Insta Data launched nationally.

Net Debt Down to Rs.3,489 Cr; Credit Rating Upgraded to A-

• Total debt of Rs.3,489 Cr as of Q1 FY26-27, down from Rs.4,001 Cr in Q4 FY25-26; comprising Rs.211 Cr bank debt and Rs.3,300 Cr NCDs.
• Bank debt reduced to Rs.211 Cr as of June 30, 2026, from Rs.1,926 Cr a year earlier (reduction of Rs.1,715 Cr).
• Free cash and bank balance of Rs.6,558 Cr at end-Q1 FY26-27; total funding visibility of ~Rs.11,800 Cr including Rs.5,200 Cr incremental funding from ECBs and an Indian private bank.
• Funding raised in Q1: Rs.1,183 Cr from promoter warrants (June 2026) and Rs.6,400 Cr first tranche (ECB and Indian private bank debt and non-funded facilities).
• Management prioritizing debt reduction over equity issuance going forward, expressing confidence in the debt reduction roadmap outlined by the CEO.
• Credit rating upgraded: CRISIL assigned A- stable (May 2026); ICRA upgraded to A- stable (June 2026).

3× Cash EBITDA Target by FY29; Execution is Next Focus

• FY29 guidance reaffirmed: sustained net adds, double-digit revenue growth, and ~3× increase in cash EBITDA from ~Rs.9,200 Cr (FY25-26) to ~Rs.27,600 Cr (FY28-29).
• Revenue CAGR of ~16.8% over the three-year period (FY25-26 to FY28-29) is the underlying assumption for the cash EBITDA target.
• All seven critical business parameters delivered in Q1 FY26-27, with management viewing each as a building block toward FY29 guidance.
• Network OPEX broadly stable in Q1 FY26-27 despite expansion, as internal efficiencies offset cost increases; inflationary pressures (e.g., diesel) may impact in coming quarters.
• Roaming access charges rose sharply in Q1 FY26-27 due to higher wholesale participation, described as cash-accretive with lower percentage margins but positive cash contribution; higher costs expected to be offset by wholesale cash generation.
• Enterprise business seeing strong demand; MoU signed with Andhra Pradesh MSME Development Corporation to digitally empower 100,000+ MSMEs.
• Next focus area is pure execution, with management citing continued promoter support and ongoing lender conversations as the financial architecture underpinning the roadmap.