Vodafone Idea Limited (IDEA.NS) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Vodafone Idea Limited Q2 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Abhijit Kishore, Chief Executive Officer, Vodafone Idea Limited. Thank you, and over to you, Mr. Kishore.

Thank you, Renju. A warm welcome to all the participants of this earnings call. It's a pleasure to be speaking with you on my first earnings call as CEO. Before we begin, I would like to acknowledge that this quarter marks an important transition for our leadership team. I stepped into this role on August 19, and I want to thank Akshaya as well as other members of the management for making this transition seamless. I also want to thank Mr. GVAS Murthy, the earlier CFO, for his contribution in guiding us through a significant period of transformation. He is there on the call with us and will provide his inputs as required. I'm equally delighted to welcome Mr. Tejas Mehta our new CFO, who joins us from Mondelez with over 25 years of experience across India and international markets, leading large P&Ls through periods of growth, transformation and integration. As the new CEO, my philosophy, if I have to capture it in one sentence would be employee first, customer always and experience is everything. The reason I believe in this is that our employees are the cornerstone of everything we stand for. Empowered, engaged and valued employees create seamless experiences for our customers whether it is a new site or a new process or a launch of a new product that makes our customers' life easier. It isn't just a philosophy. It's our way of life, a culture to deliver our core purpose, world-class experience that differentiates us in this extremely competitive market. When our people feel valued, customers feel the difference. Let me provide a brief update on the recent AGR judgment. The Honorable Supreme Court via its judgment dated October 27, 2025, and November 3, 2025, has permitted the Government of India to reconsider and take an appropriate decision with reference to the additional AGR demand as well as to comprehensively reassess and reconcile all AGR dues, including interest and penalty up to the financial year 2016 and '17. We are in discussion with the DoT for the next steps on this matter. Before I move on to the company's specific performance, let me share some thoughts on the Indian telecom market and growth opportunities. The telecommunications sector is not merely evolving but being reimagined through groundbreaking technological advancements and visionary strategy. Telecommunications, more importantly, wireless communication in India presents an attractive narrative of growth potential with nearly 1.2 billion total wireless subscribers and an overall wireless tele-density of over 83%, the country has made significant progress. Urban areas boast a tele-density of nearly 127%, while rural regions have reached nearly 60%. And the Internet subscriber base is closing in on a 1 billion mark with a remarkable 44% originating from rural areas, signaling a profound digital democratization. The growing population, the low penetration, and the increasing penetration of smartphones and affordable data plans, combined with the government's vision of digital India, are key to the long-term growth for the wireless sector. The improving tele-density reflects the rapid digital adoption. UPI transactions grew to 19.6 billion transactions by volume worth nearly INR 25 lakh crores, increasing almost 31% year-on-year. According to Worldline's India Digital Payments Report released in October 2025, the transaction growth was fueled largely by frequent low-value transactions of as the Kirana effect. This grassroot level participation underscores that digital connectivity is not a privilege or luxury anymore, but akin to a fundamental right. The Indian government push towards the Digital Bharat and Viksit Bharat 2047, thus also relies heavily on robust telecom infrastructure. As a telecom company, we strive to be a facilitator of the Digital Bharat journey, bringing seamless Internet access to a larger population and enhancing digital literacy. With India poised to become one of the highest mobile data traffic-generating nations per active smartphone by 2030, the industry needs to be innovative and nimble to keep up with the nation's growing connectivity demand. Moving on to the results. On Monday, our Board of Directors adopted the unaudited results for the quarter ending September 30, 2025. All the results-related documents are available on our website, and I hope you had a chance to go through the same. Let me provide key highlights for the quarter, progress on our investments and its positive impact, along with the update on our key strategic initiatives. Let me now talk about our strategic initiatives. Our first strategic initiative is our focused investment approach. I'm glad to inform that since we initiated the launch of 5G services in Mumbai in March '25, over the period of the last 6 months, we have expanded our 5G services to all 17 circles where we hold 5G spectrum. These 17 circles contribute nearly 99% of our revenue. In these 17 circles, our 5G services are available in 29 cities, and we continue to expand the 5G services to other cities based on customer demand and 5G handset penetration. In addition to the 5G rollout, we continue to invest towards expanding our high-speed broadband network coverage and capacity by adding new 4G sites and upgrading our core and transmission network. We increased our 4G population coverage to over 84% as of September 2025 compared to nearly 77% as of March 2024. Our 4G data capacity expanded by over 38%, driving a 17% improvement in 4G speeds in September 2025 as compared to March 2024. In quarter 2 financial year '26, we invested INR 17.5 billion in CapEx. We added over 1,500 new unique 4G towers during the quarter, reinforcing our focus to deliver superior connectivity. We strengthened our 4G with the deployment of around 3,200 new sites on the sub-gigahertz spectrum in the 16 circles. We also added over 3,600 additional sites on 1,800 megahertz and 2,100 megahertz band, enabling faster speeds and enhancing indoor coverage. Over the period of the last 1 year, we added around 19,000 broadband locations and around 90,000 broadband sites. As of September 2025, our total broadband site count stood at nearly 527,000. Additionally, we have also deployed over 13,000 massive MIMO and more than 12,400 small cells. Moving on to market initiatives. During the quarter, we continued to build on our core strategy of prioritizing customer experience, driving value, and fortifying our digital ecosystem. Our focus remains on delivering sustainable growth by enhancing our product portfolio across both prepaid and postpaid segments as well as deepening our presence in the digital market. In the prepaid market, our strategy continues to yield positive results, especially with our flagship Non-Stop Hero plan, which offers unlimited data 24/7. This industry-first proposition has become a key driver for our new customer acquisition and an engine for higher renewals and upgrades among our existing base. This strong uptake has significantly contributed to the growth in our 4G and 5G subscriber numbers. Another program that proved to be a great retention tool for us was the Vi Guarantee program. You would recall that the program provides a 2-day extra validity credited on every unlimited voice recharge upwards of INR 199, which results in 24 days of extra validity distributed over 12 months for our unlimited voice subscribers, thus rewarding customer loyalty to the network. For our postpaid customers, we launched REDX Family Plan, India's only family postpaid plan that offers unlimited 4G and 5G data and international roaming, along with a host of premium travel, lifestyle and entertainment benefits. Built on the success of the flagship REDX postpaid plan, Vi REDX Family Plan is a unique industry proposition where all the family members will be offered the same data benefit as the primary connection. This means that the primary and add-on members of Vi REDX Family Plan will enjoy unlimited data, entertainment and have access to a suite of premium benefits. They will also have access to Vi Priority services where REDX customers can enjoy exclusive benefits, including 24/7 dedicated customer care, priority handling at stores and doorstep SIM delivery for senior citizens. Easy+, our exclusive app for select postpaid customers, enhances its offering with new features like Vi Shop and Vi MTV. It also expanded to an omnichannel experience with the launch of its website. On the back of these initiatives, the data traffic has grown by 21.4% year-on-year at the overall level and the data usage for 4G and 5G subscribers increased by 20.3% for the same period of time. The consumer ARPU has shown a year-on-year increase of 8.7%, reaching INR 180. The number of 4G and 5G subscribers reached 127.8 million, an additional 0.4 million customers over the last 12 months. We have been working on constantly improving our international roaming pack attractiveness for the end customer. Our roaming packs are now available in 151 countries worldwide. I'm pleased to share that we remain the only operator in India to provide truly unlimited data and calls in 40-plus countries, giving travelers complete freedom to stay connected without worry. Vi has also introduced a curated travel insurance proposition in partnership with Aditya Birla Capital Digital as an exclusive benefit for international roaming pack users, making every journey safe and more rewarding. To make our network more secure for customers, we've launched 2 new initiatives under the Vi Protect umbrella, a comprehensive AI-powered security measure against SPAM voice calls that flags fraudulent and SPAM calls in real-time. Additionally, under Vi Protect, we also launched an upgraded AI-powered cyber defense and incident response system to protect its core network and enterprise operations. Moving on to Vi Business. Vi Business continued its strong momentum during the quarter, reinforcing its position as a trusted digital partner for enterprises across India. With a strengthened 5G infrastructure and a diversified portfolio spanning mobility, connectivity, cloud, IoT, business communication, and cybersecurity, it is empowering businesses to thrive in the digital economy. At India Mobile Congress 2025, Vi Business demonstrated its leadership in enterprise digital transformation by displaying cutting-edge enterprise solutions that were powered by AI and centered on security. Vi Business launched IoT Innovation Lab, India's first telco-backed lab for innovation, co-creation, and certification of IoT devices and applications. Other key launches at the event were AI-powered managed Wi-Fi solutions, secured hybrid SD-WAN applications and robotics, AI-powered CCaaS, VR experience of IoT Lab, AI-powered platform for proactive diagnosis of IoT services, multi-cloud services, and autonomous security operations center. Vi Business also showcased growth stories of their MSME customers who were positively impacted by India's largest digital advisory service for MSME, the ReadyForNext program. The showcase underscores the company's commitment to empowering enterprises of the scale with secure, scalable and intelligent digital infrastructure. Vi Business also partnered with Google to offer exclusive offers on Google Workspace for MSME under the ReadyForNext program, thus strengthening our position as the preferred digital transformation partner for the MSME segment. I'm happy to share we are witnessing rapid adoption of our AI-powered contact center as a service across BFSI, BPO and manufacturing sectors. Vi Business CCaaS was launched last quarter in partnership with Genesys. The rapid adoption underscores strong market demand for intelligent automatic customer engagement. Vi Business is driving significant growth and value-led innovation in the IoT space. The smart metering business aims to deploy 12 million solutions in the next 3 years, which will establish us as a key enabler of India's smart energy transition. Furthermore, the launch of IoT Innovation Lab in collaboration with AWS and C-DOT positions us as the next-generation hub to co-create rapidly test and scale concepts across sectors like automotive, manufacturing and connected infrastructure. To support the exponential growth in enterprise data traffic, we are executing a focused network expansion strategy. As a part of this, we are developing dedicated enterprise corridors across key cities, Mumbai, Pune, Bengaluru, Hyderabad and Chennai, adding over 2 terabytes per second of new capacity and upgrading our data centers. These investments significantly strengthen our ability to deliver high-speed, low-latency connectivity for mission-critical enterprise applications. Our efforts have also been recognized externally. Vi Business received the Customer Experience of the Year Telecommunications Award at the Asia Experience Awards 2025. Vi Business was also awarded the Best Innovative Technology Implementation of the Year at the CIO Conclave and Awards 2025 for our Enterprise Connection Management platform, which is Vi Business Assist. The next strategic initiative is driving partnerships and enhancing digital revenue streams. As emphasized in the earlier calls, our aspiration is to become a fully integrated digital service provider with a distinct goal of enhancing digital engagement with consumers and generating revenue through targeted streams. Our articulated strategy regarding this initiative has been to achieve it through strategic partnership and to offer the majority of these services via Vi App. Over the past 3 years, we have transformed Vi App from being just a mobile account management destination to a platform where users can access multiple services on a single app. Users can stream live news and other live TV programs on 300-plus TV channels. Users can also play their favorite games, pay their utility bills, book metro tickets and shop across certain categories through the app. These features have resulted in robust adoption growth for Vi App as well as improvement in our app rating. The Vi App experience was further elevated with the launch of Vi Finance this quarter. Vi Finance enables users to access personal loans, fixed deposits and credit cards directly through a simple app-based interface. We have entered into a strategic partnership with Aditya Birla Capital and recently with InstaMoney to offer instant personal loans ranging from under INR 50,000 to up to INR 5 lakhs. Customers can also book fixed deposits on Vi App by choosing from a range of options between banks and NBFCs, optimizing for the best interest rate. With this, the Vi App has now expanded to include Vi Games, Vi Shop, utility bill payment, financial services under the Vi Finance, enhancing Vi App's utility as a daily digital companion. Our Vi Movies & TV OTT app continues to strengthen as a key digital engagement driver. It offers our prepaid and postpaid users access to 20-plus OTTs through various subscription options. Vi Movies & TV plans are also bundled with additional data benefits, allowing customers to stream their favorite content seamlessly without worrying about the data consumption. Vi Movies & TV has grown well in terms of adoption and consumption in the last 18 months since its launch. The focus is to continue to scale, ingest more varied content and build distinct features to make the app a destination of choice for more and more customers. I would like to reiterate that we'll continue to have a sharp and disproportionate focus to build the digital ecosystem with our partners, enabling a differentiated experience for new users. To this effect, we have a strong pipeline ahead and you should see more propositions rolling out in the coming quarters to help drive and deliver enhanced customer value as well as make for incremental monetization opportunities. Moving on to the CapEx deployment plans and other developments this quarter. With quarter 2 CapEx, we have now expanded our 4G population coverage to over 84% and rolled out 5G coverage in all the 17 priority circles. We remain actively engaged with our lenders for tying up debt funding towards the execution of our long-term network expansion plan. We have also witnessed improvement in our operational EBITDA during the quarter, and Tejas will provide more color on that. With that, I hand over the call to Tejas, who will share the financial highlights for the quarter.

Thank you, Abhijit. At the outset, I also want to place on record contributions to Mr. Murthy. Thank you and help in my transition. Good afternoon, everyone. It's my privilege to join today's call and be speaking with all of you. It is my first earnings call, and I'm excited to be part of the Vodafone Idea team. My priority will be to focus on continued operational excellence and long-term value creation. With that, let me take you through the financial highlights for the quarter. The revenue for the quarter was INR 111.9 billion, registering a growth of 2.4% on a year-on-year basis. Sequentially, the revenue grew 1.6% from INR 110.2 billion in Q1 FY '26. The reported EBITDA for the quarter was INR 46.9 billion, which improved by 3% on a year-on-year basis from INR 45.5 billion in Q2 FY '25. This translated into a reported EBITDA margin improvement of 20 basis points from 41.6% to 41.9% during the same period. The reported EBITDA also improved sequentially by 1.6% from INR 46.1 billion in Q1 FY '26. However, as you all know, we have also been reporting the cash EBITDA as that provides a better view of the underlying financial performance. The cash EBITDA for the quarter was INR 22.5 billion, which declined year-on-year by 3.4% from INR 23.2 billion in Q2 FY '25. This was as the investment cycle that was initiated in Q3 FY '25 that resulted in higher comparative network operating cost in this quarter. Hence, when you compare the cash EBITDA on a quarter-on-quarter basis, there has been a sequential improvement of 3% from INR 28.1 billion in Q1 FY '26. This translates into a cash EBITDA margin improvement of 30 basis points from 19.8% to 21.1% for the same period. Depreciation and amortization expense and net finance cost for the quarter were INR 55.7 billion and INR 46.8 billion, respectively. Excluding the impact of Ind AS 116, the depreciation and amortization expenses and net finance costs for the quarter were INR 39.9 billion and INR 36 billion, respectively. CapEx spends for the quarter were INR 17.5 billion and for half 1 FY '26 at INR 42 billion. We remain engaged with lenders to secure the long-term debt financing to support our CapEx plans of INR 500 billion to INR 550 billion. The debt from banks has further reduced to INR 15.3 billion as of September 30 from INR 32.5 billion as of September 30, 2024, a reduction of INR 17.2 billion in the last 12 months. The cash and bank balance stands at INR 13.8 billion as of September 30, 2025. With this, I hand over the call back to Renju and open the floor for questions.

[Operator Instructions] The first question comes from the line of Rishabh Dhancholia with HSBC.

A couple of questions, please. Firstly, on the subscriber trends. Subs loss actually increased quarter-on-quarter. What drove that? And are you seeing any churn out to BSNL because BSNL reported gross subscriber additions for the month of August and September as per TRAI actually improved. And are you -- and in the areas where you have rolled out 5G, how has been the subscriber traction? And are you seeing lower churn in those areas? Secondly, on CapEx, what is the outlook on CapEx for the second half of the year? And how much of it is dependent on the additional capital raise?

Okay. So Rishabh, I'll just take your question one by one. So I'll start with the first one that you said on the subscriber loss. Yes, you're right. I think there has been a marginal drop. But if you look at it from a long-term point of view over the last couple of quarters, we've been reducing our delta from a 5.2 to a 1.6 to a 0.5, and there has been an increase to a 1 million subscriber loss. Some bit of a seasonality impact as well. But I think the fundamentals of the business are pretty intact, and we don't see making any changes to our long-term view as far as the subscriber is concerned. Also, we continue to see the 4G and 5G devices addition on our network as we are rolling out more and more 5G sites as well as the 4G sites. We also see a clear positive and a stable growth coming from the areas where we have invested. And we have been saying that while we have increased our coverage from 77% to 84%, our endeavor is to take it to 90%, and those are the areas where we will keep moving. The other thing which has kind of also helped in better engagement and retentivity of our customers is the proposition that I also spoke about on the Superhero and the Non-Stop Hero, and that's seeing a very good traction for us, including the Vi Guarantee. And the data user per customer, which you see has kind of increased to 18.5 GB is also a testament to the fact that the customers are actively involved and engaged in our business. Coming to your second question of seeing of -- are we seeing any additional churn to BSNL, I don't think we are seeing that. I think, as I said, it's more a seasonality and a marginal impact that we see in this quarter, and we are not changing any long-term view. On the CapEx for the H2, I think we've kind of spent INR 4,200 crores of CapEx in the H1. And our guidance is that we would be in a position to get from a year on point of view, roughly in the range of INR 7,500 crores to INR 8,000 crores of CapEx. And we are not really looking for the external funding for this particular CapEx. It is part of the internal accrual as well as the money that we have. And our focus continues to give additional coverage on 4G as well as on 5G.

Yes. You mentioned that you have not changed your -- just a follow-up on the subscriber trend. You mentioned that you have not changed your outlook or long-term view on subscriber additions. Any guidance as to when can we see positive subscriber adds or subscriber churn turning around? Any guidance on that?

So I mean, as I said, we are kind of engaging -- keeping the customers engaged as far as our product proposition is concerned and our network enhancement is concerned. Our challenge has been on the extent of coverage that we have not been able to do. And we firmly believe that the more sites and the more 4G and 5G sites that we roll, we will start to seeing this trajectory getting into positive.

And if I may, one follow-up on the CapEx. You said we plan to do INR 7,500 crores to INR 8,000 crores of CapEx this year. Where will this take us in terms of unique sites? We are at around 197,000 unique sites right now. Where do you think we will land up after spending this amount of CapEx?

Yes. So Rishabh, I think the way we look at it because it's a combination of the 4G, 5G layer addition as well as some bit of core and transmission. So it will be difficult to kind of give me a forward-looking statement on the number of sites, which is there, but there will be a mix between 4G and 5G on the radio and some bit of it on the transmission and...

Next question comes from the line of Sanjesh Jain with ICICI Securities.

I have a few of them. To start with the data customer, which saw a decline, while we had a growth last quarter. And if I look at in the last 12 months, we have added close to 90,000 BTS there on the mobile broadband side. Now when should we expect some traction here in terms of consistent growth coming in? And if you can also help us understand how are the circles growth where we did the CapEx early in the cycle to just understand how can we see that traction coming in as the other circle also mature in terms of coverage?

Yes. So Sanjesh, thanks for the question. I think two parts of the question that you're saying. One is on the data subscribers that you said. So we've kind of added 4 lakhs customers in this quarter as far as the data is concerned. And we've kind of also -- as I was explaining that we have kind of launched two of the very good and engaging propositions on the Superhero and Non-Stop Hero. And we see the customers getting engaged and where we see the data usage per customer going on. Yes, the data customer growth is also linked to the overall subs coming down. And hence, that's one action for us. Second question that you asked is on the areas where we have invested early. We are clearly seeing better traction there because as and when the customers are using our services, obviously, they are getting a much differentiated experience, both on the network experience as well as on the product proposition experience. So we are very hopeful that this curve will kind of turn pretty soon in the positive territory for the subscriber as well as the larger customers on the data subscriber addition.

Abhijit, thanks, but still can you help us understand some of the circles like Mumbai and all where we invested, how is the traction there in terms of gaining the subscribers on the broadband side?

Yes. So see, we see in the circles, I mean, not specifically name Mumbai or Delhi for that matter, but in the circles that we have invested early, we clearly see a traction better where we see lesser churn of the customers that we see. We see a better engaged customer as far as the data usage is concerned. And we also see a better traction in customer as far as our customer acquisition is concerned in those areas. So our earlier part of the investment has gone into some of the urban areas. And there, we see a clear traction where we see a much better retentivity and engagement of our customer. I don't want to kind of get into the circle level one, but at a national level, we clearly see that trend. And obviously, it is emanating from the fact that of the early investment that we have done in the urban market.

No, that's what I said. If I look at the country as a whole, which is the subscribers we disclosed that at least after last quarter acceleration, we have seen a deceleration in this quarter. But you mentioned it is purely a seasonal factor?

Yes, because I don't think -- see we made some bit of the product which was there, which kind of we have taken off or we have kind of increased. So there's a very marginal factor there, but it is more a seasonal factor that we see. And we are pretty confident that we'll kind of come back as far as the delta is concerned on the customer loss.

Got it. Now second question on the customer engagement itself. If I look at the data usage per customer on our network versus the peers' network, we are at 18 GB, they are at 28 GB per month. Now how do we -- so we need to build capacity both in terms of user behavior being similar to the peer network, and then we need to add the customer. So how are we planning in terms of expanding the capacity? So that's number one. Number two, peers have to the advantage of having the 40% or more of the data running on 5G network where the capacity is higher, so they can still carry those data on the network. Now we are very initial phase as far as 5G. Now how will we tackle this issue of creating capacity experience and then growing?

Yes. So Sanjesh, the first question on the data usage growth, you're right. We are at 18.5. But the way we look at it from where we were and where we have reached has been a significant jump because we have not been investing for some time. And in the last couple of quarters, the investment has started. And we see a pretty significant jump as far as, as I said, because of the data usage, because of the better network experience as well as the product proposition. So that's one part on the data usage part of it. Secondly, from a capacity utilization point of view, we have enough headroom right now in both 4G as well as the 5G network because 5G, as you would know, we have just launched in the last 2 quarters itself. And then the third part is, historically, this difference has been there between the competition and us as far as the delta on the data usage is concerned. I think it's a combined impact for all of that. But if you were to look at the data usage increase on our network, we have kind of had an increase of over 20% over the last 1 year, which is a clear reflection of improving the subscriber engagement. And our current focus is to enable more and more subscribers to experience the improved network. And hence, some of the product propositions that we have launched, which is unique, is actually addressing that need.

Fair enough. Just one question on 5G. It's been two quarter for us launching 5G. We start 5G at 1.5 GB data plan unlike peers who start at 2GB. Any plan for us to move to a 2GB so the premiumization effect keeps start playing even on our ARPU from the 5G?

So I think when we had launched 5G, we had started with an introductory offer of a INR 299 and 1.5 GB, which we have now in the markets where we have kind of become a little 2, 3 months in the launch, we have kind of changed that into now INR 349. If you see the competition pricing, it's between INR 349 and INR 379. So we've -- in a manner in the markets, which is where we have launched a couple of months back, we've moved to that. But in some of the markets, as you would know, out of the 29 cities that we have 5G in the 17 circles, 24 of them have come in this quarter itself. So as and when we see a critical mass of a customer coming on to our 5G network, we'll see how do we upgrade that part to monetize better.

Abhijit, what is the subscriber count on 5G for now as we speak or end of the quarter?

We don't share the separate count for the 4G and 5G. It's a combined count only, Sanjesh, that we share.

Got it. One on the CapEx. Now that we have some more time in terms of raising capital, how do we plan to prioritize the CapEx what we are doing right now? Will it be more capacity creation over the coverage? That's how we should look at it?

I'll say it will be a mix of both, but it will be more towards coverage because we have enough capacity as we speak. And also towards -- and within the coverage, it will be between the 4G and 5G. So that's the way I will put it. And obviously, we'll need to put some bit of it on the core and transmission as well. So it will be a fair mix of all, but it will be more towards the coverage between 4G and 5G.

One last bookkeeping question. There was a sharp drop in the finance cost in this quarter. Was it to do with that now the interest on the moratorium stops because we are out of the moratorium period? Is that the reason? Or is there anything else in the drop in the finance cost?

Tejas, do you want to take that?

Sure. Thanks for the question. It's not to do with the moratorium. There have been some settlements with some various vendors on account of which we have made some provisions in the previous quarter that are now reversed and also a slight favorable impact on lower ForEx fluctuation. So that has contributed to the decrease in the interest cost.

Tejas, what should be the underlying finance cost on a steady-state basis for us?

It will be more -- I mean, I can't give you exact numbers, but more like previous quarters.

Like Q1 or it's more like Q2?

Yes, broadly there. There will be some differences, but broadly towards that prior quarter.

The prior quarter, average of the two prior quarters will be the...

Yes, yes, correct.

We should work with, right?

Yes.

[Operator Instructions] Next question comes from the line of Saurabh Handa with Citigroup.

First, on the pending fund raise, I had two questions on this. Firstly, do you think banks now that you must have been in further discussions with them over the last couple of weeks, do you think they will be waiting for an official relief package from the government, which I suppose could take a few months as there are no repayments due before March? Or could this be independent of when the relief package comes now that we do have a Supreme Court verdict? And just secondly, on this, what is the status of raising credit from nonbanking sources that you have previously spoken about? Is that something where timelines could be advanced?

Okay. Saurabh, I'll take the first one and then request Tejas for the second one on the rating credit from the nonbanking. So on the first one on the fundraising, I think as you rightly said, we are engaged with the banks. And with the recent development of the Honorable Supreme Court order is pretty clear and government being a 49% equity holder and the government making it also amply clear that in the Indian context, three private players are required. We are looking at the solution, which we believe will be best and with the long-term view from the government. And our sense is that since the Supreme Court order has come recently, might be there would be a little bit of a dependency of that with the banks when they are looking at a long-term funding. But we are engaged with them and we are kind of working pretty closely. And as and when we get to hear, we'll come back to you. Tejas, on the question on rating credit.

Sure. So Saurabh, the current credit rating, as you know, is BBB-. So that stays where it is. And maybe if you can elaborate your question.

Sorry, no. What I meant was you had spoken about raising credit from nonbanking sources, I guess, private credit. So I just want to know can that be something which can be advanced ahead of, say, funding from banks?

Yes. So Saurabh, I think we are -- as we said, we are talking to many banks and the NBFCs both. And as and when we get closer to the deal, we'll come back to you. As we speak, we are engaged with multiple partners at this point in time.

Okay, sure. And just a second question, could you just remind us of the total quantum of AGR debt which is outstanding as of September? And within this, how much would be the principal portion?

The principal and the interest, we can't share like that. But as of September 25 -- 25 September, it's around INR 79,000 crores -- INR 78,500 crores of total amount on the AGR.

Next question comes from the line of Sumangal Nevatia with Kotak Securities.

Sir, my first question is with respect to our end goal of 90% coverage for 4G. What is the timeline we are looking at? And how much more CapEx will be required to reach 90%?

Yes. So as I said, we are right now at 84%. And our sense is that over the next couple of quarters, we should be able to get to the 90%. I can't really give you a finite timeline right now. And the CapEx -- approximate CapEx that is required would be in the range of INR 4,000-odd crores for the coverage between 84% to 90%.

Okay. Okay. So a few quarters is where I think we can hit this end goal, right? So that's...

Yes. As I was talking to probably Sanjesh, I was trying to explain that we are keeping the balance between the expansion, getting the coverage on the population as well as keeping the 5G part intact. So that's the reason we can't really give you a finite time right now, but the endeavor is to get as soon as possible to the 90% and bridge that gap.

Understood. Understood. And sir, if you look at the trend on the subscriber losses, it's encouraging to see a declining trend. What is our sense? When do you see this reversing to a gain starting -- I mean, will it be now closer to that 90% goal in a few quarters? Or in between only in this journey, we should now expect a reversal from coming months?

I think it will be -- it's in a manner like I was saying, the reason that we need to kind of accelerate our coverage expansion is to ensure that we give better connectivity to our customers and better experience in the areas that we are not covered. So I'll not say it is really linked to that getting to a 90% only covering, but it will be definitely having an impact. So I can't really give you a finite timeline on turning positive. But when we say and I made that comment that the fundamentals are in place, we are looking at a better engagement of customers in the markets where we have invested. Our product propositions are unparalleled. So we are working towards making that positive as soon as possible. I would not really want to link it to say when we reach 90% only then we kind of get to the positive.

Understood. And just one last question. I mean with related to our discussions going on with DoT and the government with respect to AGR dues, what sort of timeline are we expecting in terms of some conclusion here? And against our INR 80,000-odd crores of dues, any thought process you can share? What is our ask with the DoT and the government?

So Sumangal, I said we welcome the order from the Honorable Supreme Court, and we are pretty hopeful government being a 49% player to look at a long-term solution, and we are engaged with the DoT. I cannot really give a timeline at this point in time on saying when will this get solved. But the government has been extremely helpful, and we are very hopeful that it will be resolved as soon as possible.

Next question comes from the line of Vivekanand with AMBIT Capital.

My first question is on the 5G network. You are disclosing 4G capacity, and there is also a disclosure from your side with respect to using March 2024 as the reference point from a capacity addition perspective. But I see that in your quarterly report and press release, you talk about only 4G data capacity. It would really help us if you can share some additional KPIs with respect to 5G network rollout like additional capacity created and number of sites. That is one ask from my side. The second one is the two circles where you rolled out 5G roughly 2 quarters back. Is the 5G network now handling a large part of your traffic? Are there any indicators you can provide here? That's -- those are my questions on the 5G network. I will ask my other questions afterwards.

Okay. So two parts to your question that you said. So the reason why we look at March '24 is because that's -- when our investment cycle kind of started and hence, that's a good benchmark when we were not investing and then when we started, what's the kind of delta that we have been able to create. And obviously, as you said, 4G data capacity has been increased by 38%. The second question that you asked on the 5G, why we don't share, it's an initial stage. As I said earlier, we launched Mumbai in the month of March. And post that, in this quarter, we have launched primarily, 25 out of the 29 cities that we have launched. So it's too early to kind of make that comment. While we keep monitoring that, and in the 2 cities where we -- the circles where we launched 5G, yes, the answer is that we see a much better traffic offload as far as the network on the 5G is concerned.

Okay. We'll wait for your disclosures on 5G in subsequent periods. Now there are a couple of media reports that talk about you doing trials with alternative domestic vendors, several are named by the media. And secondly, a topic which is unrelated. One of your competitors has signed an ICR with BSNL. So particularly in rural areas where the intra-circle roaming could perhaps help provide deep coverage. So what are your thoughts on these two matters? And what can you discuss further to what is shared on media on both these topics?

So, Vivekanand, I mean, to be honest, and not want to comment on what the media has written as far as these are concerned. Some of these are discussion once it fructifies, then it will be better for us to come back and talk to you. As we speak, there is no conversation that we are really having with anybody on the ICR at a BAU level. And the first question that you said on the other partners, I mean, everybody keeps exploring that opportunity, which is what we are also doing. But there's no firm change of plan as we speak. Our partners from a network equipment point of view are pretty much what we have disclosed. So there's no change as we speak. But yes, from an evaluation point of view on the technical front, there would be some evaluation, which we keep doing. And even the government would want the indigenous vendor, and hence, we would be exploring that opportunity clearly.

Okay. My last question is on the technology upgrades and the debate on 5G stand-alone versus non-stand-alone. So previously, when you were talking about, say, your just-in-time CapEx strategy, you would highlight that you are able to take advantage of advancements in technologies even within the standards, right, whether it's 4G or 5G. And there, that would help you economize on your deployments. So I want your thoughts, one, on this SA versus NSA debate on 5G? And secondly, is there a way for you to roll out your 5G network incrementally? Because I think you mentioned that you've rolled out in 25, 30 cities. Surely, there is a lot more scope for you to roll out more 5G. So is there a way you are able to now think about 5G rollouts in a more frugal manner given that you are late versus, say, the incumbents who set up pan-India networks?

Yes, Vivekanand, two parts of the question that you're asking. One, obviously, on the 5G. As you know, at Vodafone Idea Limited, we have kind of taken the route of NSA architecture, and that's what we are rolling out right now. And I think that's kind of doing the work for us. But yes, at the same time, I can also say that at any point in time that we feel like moving to the SA architecture, the one that we have right now is capable to move to SA. So as and when we feel the need to kind of move to the SA architecture, we would evaluate that and do that. As a second question of saying how and where are we going to go, I think, again, as I said, the balance of the CapEx for this year as well as going forward is going to be a fair mix of getting to a 90%, providing capacity in the markets where we feel that there is congestion and a fair bit of 5G as well.

Next question comes from the line of Aditya Bansal with Motilal Oswal Financial Services Limited.

My first question is on the network OpEx above EBITDA levels. So despite rollout on 4G as well as on 5G and also seasonality in terms of power outages, the cost above EBITDA and network has been fairly stable, in fact, lower than December '23 before it began. What explains that?

Tejas, you want to take that?

So if you look at our network cost above EBITDA, right? And I'm just looking at the variance and the trend over a longish period of time, you are right, they are slightly flattish. Last quarter-on-quarter, we have increased only marginally. Year-on-year, it's increased 4%, and that is from the investments that we have made in the network that Abhijit mentioned. And also there is a benefit inherent with the cost optimization that we have spoken in the past.

But it has been lower than December '23 before you began rollout. So that's why I was checking out what could be the reason? Is it more efficiency that you are driving, anything on the IT cost, et cetera?

I think we can take it offline, but there could be in Ind AS 116 impact as well because there are some which are below EBITDA. But we can take it offline and cross-check.

Sure. And another one was on the non-wireless side of things. So revenue has grown very sharply this quarter there. So is this a sustainable trend? Or was there any one-off benefits on the non-wireless side?

What do you mean by non-wireless, Aditya?

Basically, you have customer revenue and the subscriber base that you gave out. So if I remove that from the reported revenues, so non-wireless or the enterprise revenue, that has increased like 6%, 7% on a Y-o-Y as well as Q-o-Q basis. So any particular reason there?

Yes. So I think there's no extraordinary or one-time thing is what I can tell you on the trend. I mean we have different businesses on messaging and other things. But there's no extraordinary item even in the non-voice or non-wireless that you are seeing there.

Sure. And last one, like obviously, you are in touch with the DoT on the AGR dues. But do you think if any relief comes through, the tariff hike or any potential tariff hike that gets delayed? Like how do you look at it?

Yes. I mean from a tariff hike point of view, if you really ask us, obviously, it depends on how the industry takes shape and how the leaders take the position of the tariff hike. Is there a requirement of a tariff hike? Probably the answer is yes. How fast and how soon can that happen? We'll kind of wait and watch. I will not really link it to DoT and the AGR judgment on that.

Ladies and gentlemen, that was the last question for today. Due to time constraints, we have reached the end of the question-and-answer session. I would now like to hand the conference over to Mr. Abhijit Kishore for closing comments.

Yes. Thank you, Renju. As discussed during the call, our investments have led to improved coverage and enhanced customer experience. 5G experience has been expanded to 29 cities in 17 circles. Our data usage has increased significantly by 7.8% quarter-on-quarter, showing increased engagement with our subscribers. We continue to keep exploring new avenues for debt funding for the execution of our long-term network expansion plan. Thank you once again for joining us and your continued confidence in our company. We look forward to updating you on our progress in the quarters ahead. Thank you.

Thank you. On behalf of Vodafone Idea Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.