Vodafone Idea Limited ($IDEA)

Ladies and gentlemen, good day, and welcome to Vodafone Idea Limited Q4 FY '26 and FY '26 Earnings Conference Call. 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.

Thank you, Yashashri. Good afternoon, and a very warm welcome to all of you. Thank you for making the time to be here today. On 16th May 2026, our Board of Directors adopted the audited results for the quarter and year ending March 31, 2026. All the results related documents are available on our website, and I hope you have had the chance to go through the same. This has been a quarter and a year of meaningful significance for Vodafone Idea Limited. Let me share our progress on the key strategic initiatives, after which I'll hand it over to Tejas, our CFO, who will share the details on the company's financial performance. Before moving on to the results, as you already know, Mr. Kumar Mangalam Birla, Chairman of Aditya Birla Group, has taken over as the Non-Executive Chairman of Vodafone Idea's Board of Directors. In addition, the Aditya Birla Group has also committed to infuse an additional equity of INR 4,730 crores. These developments reaffirm the strong and continued commitment of the promoter group to our long-term growth. Mr. Ravinder Takkar, who served as the Non-Executive Chairman, continues on the Board as the Non-Executive Vice Chairman. I would also like to update you on the AGR matter. This has been an area of close attention for all stakeholders. Following the honorable Supreme Court's direction permitting the government to reassess our AGR liability, a DoT constituted Committee completed its review and communicated its decision on April 30, 2026. Our AGR dues have been finalized at INR 64,046 crores as of December 31, 2025, a reduction from the earlier [ frozen ] figure of INR 87,695 crores. The structured repayment schedule provides significant long-term clarity for the cash flows. The payment schedule till FY '35 remains unchanged. The balance AGRs have to be paid in 6 equal annual installments of INR 10,608 crores from March 36 to March 31. This development meaningfully improves our balance sheet and provides a definitive conclusion to the AGR matter. Tejas will cover the accounting treatment and financial impact of this development. We are deeply grateful to the government of India for conclusively resolving the AGR matter. This is not just a resolution for Vodafone Idea as a company. It is a statement in support of India's digital infrastructure ambitions. I'm also delighted to share that our credit rating and outlook was upgraded by ICRA in March 2026. We were assigned an ICRA BBB rating with positive outlook to the company's long-term fund-based terms loan even before the recent AGR reassessment exercise concluded. This is a significant milestone and an important enabler for our ongoing engagement with lenders. Moving on to our performance. Our quarter 4 FY '26 and full year FY '26 operating and financial performance marks a decisive step forward in our journey. As you would recall, we had introduced the 7 KPI that we benchmark our performance against. I'm happy to share that we have delivered against all 7 of these parameters. Let me briefly highlight our performance across each of these 7 parameters. I'm particularly pleased to share that during the quarter, we are able to stabilize our subscriber base to 192.8 million customers vis-a-vis last quarter, a first since the merger. More importantly, we have registered improvement in subscriber numbers for the first time post merger in the month of February, which has continued into March as well. Our revenue for quarter 4 FY '26 was INR 11,332 crores, a 2.9% growth on a Y-on-Y basis. Revenue for the full year grew by 3% to INR 44,873 crores in FY '26 from INR 43,571 crores in FY '25. The cash EBITDA for FY '26 was INR 9,217 crores versus INR 9,198 crores in FY '25. We also saw a healthy expansion of our customer ARPU from INR 175 in quarter 4 FY '25 to INR 190 in quarter 4 FY '26, a growth of 8.3% year-on-year. The customer ARPU has now been increasing for the 19 consecutive quarters. The customer ARPU expansion over the last year has been driven primarily by premiumization, which is evident from our improving 4G, 5G subscriber mix, which stood at 66.9% in quarter 4 FY '26, up from 63.8% in quarter 4 FY '25. We closed the quarter with 128.9 million 4G, 5G subscribers, up from 126.4 million in quarter 4 FY '25. Our data usage in quarter 4 FY '26 has also increased year-on-year by over 30% to 83 petabytes per day from 63.8 petabytes per day in quarter 4 FY '25. We also added over 17,300 new unique broadband towers this year. Our focused execution has also translated into better customer engagement as reflected in the data usage. The average data usage by a 5G and a 4G subscriber improved 27.2% year-on-year to 20.2 GB in quarter 4 FY '26. Moving on. First, let me update through on our network initiatives. Over the last 6 quarters, we have deployed over INR 16,000 crores and added approximately 30,000 unique broadband towers and expanded capacity by adding over 1 lakhs 26,000 new broadband layers. We also expanded 4G capacity by over 27% and improved our 4G population coverage over 86% on pan-India basis to deliver superior connectivity and experience to our customers. We've always maintained that consistent and right investments has been key in stemming our subscriber losses, and we are now witnessing tangible outcomes as 4G coverage and 5G business deepens across circles. On 5G, we have made substantial strides since the launch of our 5G services in Mumbai, in March '25, we have expanded our 5G footprint significantly and I'm pleased to share that our 5G services are now live in over 80 cities across all our 17 circles where we have 5G spectrum. This expansion underscores our commitment to delivering a superior network experience to our customers. Next, our differentiated product offering and market initiatives. We have always been a brand known for creating differentiation, and we intend to sharpen this differentiation further across consumer and enterprise offerings. Our Non-Stop hero proposition, which offers unlimited data to our subscribers continues to witness great traction and has been recording a sequential growth of over 25% for the last 3 quarters. In the postpaid segment, we continue to register sequential positive net adds for 8 consecutive quarters. Our Easy+ offering designed specifically to cater to the needs of enterprise postpaid customers, we expanded the portfolio with addition of personal loans to its offering. We upgraded our Vi app offering and also supercharged AI capabilities. We launched an AI-powered recharge assistant, which optimizes value-based selection of recharge plan for our users. Under the Vi Protect umbrella, we categorize over 2 billion calls and SMS as suspected spam this quarter. Additionally, we are currently blocking nearly 250,000 domains as spam to secure our network. The Vi brand continues to garner strong awareness and bring brand affinity across all customer segments in the country. We continue to make extensive progress on the marketing front by communicating key differentiators to customers entering into alliances and introducing various innovative products and services. This quarter, we also entered into a strategic partnership with Chennai Super Kings as their official communications partner, giving us strong salience during this [ period. ] Vi Number Rakshak campaign at Kumbh was recognized at London International Award and the Clio Awards this quarter. Moving on to our Enterprise business. On the enterprise side, during the quarter, enterprise offerings across connectivity, cloud, IoT, business communication, mobility and cybersecurity demonstrated strong momentum with increasing enterprise adoption across key sectors, including BFSI, manufacturing, utilities, logistics and government. We are also developing the dedicated enterprise corridor by strengthening the fixed line capabilities with the addition of 1.3 terabyte network capacity across data centers, enhancing scalability, resilience and high-speed connectivity for enterprise customers. We are in multiple prestigious recognition during -- including Innovative Connectivity Solution of the Year at the Asian Telecom Awards 2026 for our CCaaS offering and the Aegis Graham Bell Award for Innovation and IoT. The telecom industry is well positioned for growth as need for connectivity is driven by a fast-growing economy, a growing and young population, rising technology adoption across all age groups, lower rural teledensity and increasing smartphone penetration. Collectively, these improving trends and developments give us increasing confidence in our ability to participate in the industry's growth story. Before I hand over to Tejas, I want to take a moment to acknowledge the people behind these results. As I stated earlier, we are guided by a simple belief of employees first, customer always and experience is everything. The progress we have made this year on our network, customer retention and execution has been delivered by a team that has shown remarkable commitment through a challenging period. Our employees have stayed focused, working relentlessly to rebuild the brand by delivering differentiated services and providing innovative offerings. These trends across KPIs are a clear reflection that our strategic initiatives and employee efforts are translating into tangible improvement. With that, I'll hand over the call to Tejas, our CFO, for the financial commentary. Thank you.

Thank you, Abhijit. Good afternoon, everyone. We continue to impress -- witness improving trends across key financial metrics. Let me start with the revenue. Revenue for the quarter was INR 11,332 crores, registering a year-on-year growth of 2.9%. At the full year growth, this translates to 3% at a revenue of INR 44,873 crores. Sequentially quarter-on-quarter on an EDB basis, it also grew 2.3%. This quarter actually is the highest average daily revenue in the last 6 years. Coming to EBITDA. EBITDA for the quarter was INR 4,889 crores, improving 4.9% versus the same quarter last year. This actually translated into an EBITDA margin improvement of 80 basis points to 43.1%. The EBITDA for the full year also grew by 4.8% at INR 19,003 crores. The cash EBITDA for quarter 4 also improved by 4.8% to INR 2,452 crores versus the same quarter last year. The cash EBITDA for this year -- for this full year ended at INR 9,217crores. It showed only a marginal improvement, and this is due to the 17,300 sites rollout, which actually shows our focus on overall cost management. Investment for the quarter was at INR 2,294 crores and closing the full year at INR 8,742 crores investment. Also pleased to share that our bank debt has further reduced to only INR 726 crores as at March 31 from INR 2,326 crores from March of last year, a reduction of INR 1,600 crores. The free cash bank balance stood at INR 3,715 crores as of March 31, 2026. Let me briefly explain the accounting impact of the AGR settlement. On the AGR matter, the company received a communication from DoT on April 30, stating that the committee formed for the purpose of reassessment has finalized the AGR dues at INR 64,046 crores for the year 2006-2007 to 2018-2019. The payments against these AGR dues of INR 64,046 will be made at first, a minimum of INR 100 crores annually from FY -- from March '32 to March '35. And subsequently, INR 10,608 crores annually for the next 6 years, i.e., from March '36 to March '41. In addition, the company also has to pay Spectrum usage charges amounting to INR 609 crores with interest in respect of FY '17-'18 and FY '18-'19 in 6 annual installments of INR 124 crores in between March '26 and March 2031. And hence, the company has already paid INR 124 crores as of March 2026. Consequently, in accordance with the applicable accounting standards, the financial liability of INR 80,502 crores as at 31st December 2025 was derecognized and a revised financial liability of INR 24,880 crores was recognized, which is the present value of the reduced liability and the future payments, as I stated above, the resulting difference of INR 55,622 crores along with net impact of other related provisions has been credited to the P&L as an exceptional item in the quarter and the full year financials ended March 31, 2026. With this onetime benefit in exceptional items, we recorded a net profit of INR 51,970 crores in Q4 FY '26, and a net profit of INR 34,552 crores for the full year of FY '26. To summarize, this quarter reflects the continued improvement in our operational and financial performance. In line with our stated strategy and ambition, we continue to make progress, including securing funding for future CapEx and the capital infusion from the promoters is a significant step in that direction. With that, I hand over the call back to Yashashri. Thank you.

[Operator Instructions] We'll take our first question from the line of Sanjesh Jain from ICICI Securities.

Yes. A couple of them. First, on the ARPU. If I adjust the days, it appears that ARPU has grown over 3.2% sequentially. What is driving the strong growth because premiumization is still underwhelming. We have added only 0.4 million customers on 4G and 5G. So what is driving such a sharp ARPU increment? Is this better engagement with the customer. Can you help us understand and how much more is left in these efforts to drive organic ARPU growth for us?

Yes. Thanks, Sanjesh. So I'll answer that in 2 parts. One, obviously, as you rightly said, and which is also reflected in the data consumption that you saw, which has grown over 30%, which clearly reflects that the customers are now experiencing a very different network across the country. Second, I think the increase that we see in our unlimited data customers and the proposition, which is a differentiated proposition that we launched last year, which is the Non-Stop Hero, which really gives the customer the freedom of using unlimited data, 24 hours. That really is pushing, and as I said, that quarter-on-quarter, we see a significant increase of almost 25% on the Non-Stop Hero. So both of these investments and network addition of sites, increase in capacity, increase in population, we've also added roughly around 48 million more population to OTT, which was not being able to experience our services. So all of that put together is the reflection in the ARPU, which is a very, very strong ARPU growth, and we intend to keep this growth on.

Got it. Got it. So how much more do you think this is possible? Because I can see we are at a significant discount on the ARPU versus the peers. So is there a significant gap, which we can bridge through these efforts?

So two parts, Sanjesh. One is, obviously, we are looking at these differentiated offerings to bridge some part of the gap, but I don't think the gap will be bridge only with this. The way to understand this is the mix of the customers that we have. As I said, we have almost 67% of our customers now on the smartphone with 33% of them being on our [ future ] phone. And I think that's a big lever for us to push and that opportunity is available with us to upgrade our customers. So that's one. Second, when we look at our smartphone base and the split between the customers, we are still not using data with us, though they are using smartphones on our network. That's the second opportunity that we see. And the third opportunity is that a lot of customers are still using a data quota, which is a 1.5 GB a day or a 2 GB a day for them to move into a truly unlimited Non-Stop Hero data. So I think all of these things put together, we still see a large amount of opportunity that we have in the ARPU upgrade.

Got it. Got it. My second question is on the subscriber. We have almost reached to a flattish versus a decline historically. Can you help us understand how are we behaving in the areas or in the locations where we have added the network versus the areas we have not added the network? To just get a sense, what does it really mean in terms of CapEx and that translating into a subscriber growth?

Yes, Sanjesh. So if you see our deployment of INR 16,000 crores over the last 6 quarters that I spoke of, that obviously has gone into upgraded manner in different circles, depending upon the number of customers that we had in a circle. And I'll just pick up one circle, for example, say, for example, Maharashtra, and this is one example. So we have circles like Maharashtra, Gujarat, Kerala, EPV, some of these circles where we have invested a little more than the other circle depending upon the customer availability that we had and the gap that we had. We see a very significant change in the customer in 3 things actually. One, customer acquisition. Second, the quality of customer being acquired. And the third is on the base retention. So we clearly see a difference in the circles, in the areas within those circles where we have been able to add more layers, providing better experience, better capacity and better coverage to our customers.

So any number you want to put where we have put the network, how much we have grown just to understand the intensity of benefits we can get?

So I mean, I will say that the numbers are significantly better. We don't share the numbers circlewise, but we can tell you that the circle that I need, those places, we've kind of significantly grown better. Also, one of the things that we are also seeing, which is helping both upgrading the customers as well as subscriber addition is the number of 5G cities that we have been able to launch over the last 1 year, which is upwards of 80 now. So we can't share the numbers, but you can pretty much safely assume that these are some of the circles that I named, there, the differential is pretty significant as compared to others. Most of the circles have grown, but these circles have grown differentially over the other circles.

Got it. Very clear. My next set of question is more like on the OpEx and the fund raise. Network operating costs declined sequentially while we continue to add to site. What's driving the efficiency in the network OpEx? Number two, on the fundraise, where are we in terms of debt fundraise that we are anticipating to come? How soon because that will be a key enabler in FY '27 in terms of the execution of our plan. And one related question on the shareholding pattern. Now I think both the promoter probably post CLM adjustment for Vodafone and Aditya Birla Group taking the preferential issue now reaches probably first time and equal shareholding in the Vodafone and Idea. Will that change anything in terms of the board structure or the agreement between the promoters?

Okay. So 3 questions you have asked. One is on the OpEx, network OpEx, which I'll let Tejas answer. But before that, I'll give you an answer on the debt raise and the second was on the promoter shareholding pattern. So on the debt raise, as you would know, we maintain our CapEx for the -- over the next 3 years for INR 45,000 crores. We are looking at a funded of INR 25,000 crore and a nonfunded of a INR 10,000 crore facility. We are deeply engaged. As we've said, it's a SBI-led consortium, which is looking into it, which forms part of the [ ESG ] banks, the private banks as well as the foreign banks. And we are very confident of closing that very fast. I don't want to put a time line, as you would imagine, some of these things unless a clear sign of close, we would not want to share that. So that's on the debt. But we are -- yes, we are very confident that our CapEx intensity of what we have spent in the last quarter or the last year is only going to intensify towards the total of INR 45,000 crores that we have made for ourselves over the next 3 years. As far as the shareholding pattern is concerned, as you know, these are the claim settlement. Current shareholding pattern is 16.07% for Vodafone plc and 9.57% for the ABG Group, that post the changes on the borrowings on the preferential allotment as well as the claim will stand differently, but that is only after the equity completely converted. So that's where we stand right now. The last part on the question that you said that will there be any change. I don't think there is any change that we are looking at in the Board structure. I'll hand it over to Tejas for the OpEx on the network.

Thanks for the question. And actually, if you look at just quarter-on-quarter, and I'm just clarifying the numbers, we had [ INR 2,361 ] on network costs in the prior quarter, we are at [ INR 2,345. ] So it's a small decline. And I think I spoke about the cost management efforts as well. And second, broadly, over the last few years, we worked on reducing our dependence on diesel and working on electrification of our network. So I think that has also helped. Abhijit also in the past spoken about our self-optimized networks. So I think both of them put together has allowed to keep the network costs flattish in a way.

No, no, because I was referring more like we have added 6% more site on a Y-o-Y basis. On the number of sites, if I add the loading, it is much higher. We have added almost 70,000 BTS in the last 12 months, while the growth on the network OpEx is just 0.8%. Yes so actually, one, obviously, it appears very heartening, but how sustainable is this? And should we see inflation coming from next year? Or are there more scope?

So I think both, I'll answer the quarter and the full year. Actually, you see the same trend on a quarter and on full year. I think we've definitely benefited with the efficiency efforts that we have spoken in the past. So you are right. We have been able to offset the increase that you would have otherwise seen longer rollout costs. I think that one is totally aligned. Also, if you look at the cash cost, which we also look at our cash EBITDA in the future, you will see a little bit of inflation, but our efforts on efficiency will not go away. So we will attempt to offset increase of the rollout. But yes, we will be then lapping a year of this benefit already, and hence, you might see some inflation going forward as well. But for this year and this quarter, as you are saying, it was heartening to see the efforts [ fortifying ] to be able to offset the rollout cost with efficiency.

Next question is from the line of Vivekanand Subbaraman from AMBIT.

Abhijit, I wanted an update on the 7 key metrics that you are tracking. Now my understanding is that there are certain input metrics and the remainder are output metrics. So of the KPIs that you're tracking, which are input related, what are the highest priority areas for FY '27? And is there any thought process that you can share with us to help us understand this better? And how this translates into you being able to step up outcome metrics like data usage per customer or even the ARPU number that you are talking about, the customer ARPU number?

Yes, Vivekanand, thanks for the question. So those 7 metrics that I spoke of that we track is basically revenue, EBITDA, customer addition, then the broadband customer addition are inside in the data usage. So if you really look at it, other than the data customers and the subscribers, most of them are the output-related metrics. If you were to really -- all of these 7 are very, very critical for us. But one of the things that we have always been asked question is on the subscriber because while we will have 3 pillars of growth that we have always looked at, which is one is on the ARPU upgrade, which is whether it is from a base or the upgrade. Second is on the customer addition. So customer addition remains a key priority focus for us, which is what has turned into positive from Feb onwards, and we will continue that momentum to build on that. As far as the output is concerned on the ARPU, I spoke about on the premiumization. I think that agenda is also a very, very critical agenda. On the other part, I think the -- one of the very critical agenda for us looking at the gap that we have is on the rollout and the deployment on the network for both 4G and sites, which is again part of the 7 metrics. So I think in a manner, all 7 are critical. But from an input point of view, customer addition, site rollout and broadband customer, which is a 4G, 5G customer. These 3 remains from a very, very critical one from my input parameter point of view.

Okay. Very helpful. Just one follow-up on the customer addition question. So your churn has moderated quite a bit this quarter. And if I look at the gross adds, they seem to be lower on a year-on-year basis, most likely because of your churn getting moderated. So what has really helped you in terms of moderating subscriber churn? And the related question is, is there any moderation in the market activity at an industry level to reduce the rotational churn? Are there any initiatives that you want to call out? And how should we think about the churn for you, let's say, in the next 12 months, the direction as well as any numeric thought process that you want to share?

Thanks, Vivekanand, for asking this question. I think while, yes, the answer is that we have kind of reduced the churn percentage. But still, if you were to look at the industry, we are very high. So that is one area that we are still working on. And as I was telling Sanjesh, that the areas where we have invested relatively more than the other areas, we clearly see a delta of our retentivity, which is obvious from the fact that the customers, when they're getting the experience, they tend to stay with us. And obviously, there are [ x ] percentage of customers, which keeps migrating from either a feature phone to a smartphone. And then they have an opportunity of upgrading it within our network that adds to our retentivity exercise. The other part of the thing that I would like to address is on the gross addition, which you said, and your observation is absolutely correct. We have taken some of the strategic decisions of reducing some of the cost of acquisition, which effectively means a better quality of customer because in this industry, the cost of acquisition willingly, unwillingly gets translated into a discounting in the market. So we are cognizant of that. And as and when we are launching the network, both 4G and 5G, we are conscious of that, and we are reducing the cost of acquisition and also spreading our business through the distribution channel to start focusing more on the quality of customer acquisitions rather than the quantity of customer acquisition. And that is one of the reason why in the last call, earnings call, I had said that if you were to really look at our acquisition in quarter 2, our acquisition was 21.8 million, which was dropped to 19.3 million in quarter 3, in which we have maintained at 19.1 million in quarter 4 was in a manner by that time to ensure that we are able to get a better quality of customer. And that obviously reflects in a better churn and retentivity as well. So that's one part of it. The second part is on the [ MLP ], which is a large industry, as you would imagine, in the Indian context, 47% of the customer acquisition happens where the customer is moving from one to the other operator. We have been a small player in that with around [ 20-odd ] percent share. And I think that's something that we are focusing on, again, in the areas where we are putting a network. So there is a very, very focused strategy market by market to look at how do we extract from the infrastructure that we are putting both on 4G and 5G.

Thanks, Abhijit, for the detailed explanation. My last question is not just to you but to Tejas as well. So currently, your cash EBITDA margin is 20.5%. I want to understand from you, the CapEx cycle, after you complete it, where do you see this EBITDA margin trend towards? Because we know that the gap between your EBITDA margin and that of the peers is very significant. If you can help us understand how we should think about it quantitatively? And also any levers that you want to point out? I think some of them, you discussed already, which is your cost curtailment program on network and SG&A. But if you can help us think this through better, it will be great because last year, we didn't see any incremental EBITDA margin because revenue got added, but cash EBITDA didn't flow through.

Thanks for the question, Vivekanand, I think you have heard us before. I mean if you look at the ambition that Abhijit has shared at the investor call we had, we are significantly looking to uptick our revenue and hence also the flow-through to the EBITDA cash margin. If you see where we are today, we are at 20%, and you are absolutely right. As I think of the next 3, 4 years, this has to absolutely increase. If you kind of use the same numbers I've shared with you before in terms of our double digit revenue growth and the cash EBITDA number, this will be north of 35% right now, in which year -- in which exact year, et cetera, I think we don't want to share that number. But that should be our ambition and that will be the EBITDA margin if we do what we have said in the past on our revenue growth and our cash EBITDA growth. And I think the levers, as you have said, and again, we have discussed in the past as well, largely 3 levers of growth, which is customer. Abhijit has spoken about it. ARPU, I think we have spoken about it. I think the industry pricing architecture over the next 2, 3 years. And as that plays through and our own confidence on dropping churn, which we have seen the performance of our circles, that we have seen when we will put our CapEx. Those are all the levers we will use and leverage as we look at flowing this revenue into the bottom line.

Next question is from the line of [ Rishit Agrawal from 3P Investment Managers. ]

I just wanted to understand, with the ongoing increase in smartphone prices due to RAM shortage. How are we seeing this migration from 2G to 4G? And my second question on CapEx. I see in this quarter, the CapEx was lower compared to some of our peers. Where do you think this can go in the coming quarters?

Thanks, [ Rishit, ] for asking this question. So I think from a smartphone penetration point of view, yes, there's a little bit of a dip that we saw in the smartphone in the -- being sold in the country. But I think to my mind, that's more temporary, and it's not kind of a phenomena that's going to stay. And we see typically between a 3% to 4% upgrade within our network itself on the customers who are upgrading from a feature phone to a smartphone, and that doesn't seem to be coming down at least in the last few months that we have noticed. We are keeping a close eye. I don't think that's, to be honest, a concern. So that's point number one. Point number two is the way we really look at it is the opportunity in the headroom available. And as I said, we have 33% of our base using a 2G handset, which is a large opportunity as compared to anybody else in the industry. And we are really focusing on that opportunity and starting to put the network in those areas and capacity in these areas, where we have those kind of customers who will upgrade and they need to have a much better experience. So I don't think that, to be honest, is a concern. On the -- second question is on the CapEx. As I said, we spent INR 8,700 crores in the last full year versus INR 9,600 crores of the previous year. Our CapEx intensity, as we have laid out our plan for the next 3 years of INR 45,000 crores, absolutely remains intact, and we are on that course. We will see a far greater intensity of the CapEx starting from quarter 1 and then even intensifying in the subsequent quarters of this financial year.

Next question is from the line of Gaurav Malhotra from Axis.

Just a couple of questions. So one, when I look at the VLR subscriber number percentage, it's still lower than peers. So I just wanted to get a sense on why they should be in the lower end than competitors? And the second question is now that you've launched 5G, any sense on FWA plans, et cetera?

Yes, Gaurav. Thanks for the question. So I'll answer the second one first. So on the FWA, yes, we are kind of looking at some of the pilots. As we said, that we launched Mumbai on the 5G last year, and now we are upwards of 80 cities. We are evaluating FWA. But right now, the focus largely on the mobility because I think we have a large gap on the mobility front on both 4G and 5G. So I think the focus will definitely be on the mobility and the connectivity. FWA will be a part of the strategy, but only in select places. So that's the strategy that is there. That's what we had said, even last time. On the VLR question, we have a mix of customers because of the network experience remains patchy at some time, which obviously results also into a much higher churn. So that's the only reason that we see that we have a fairly decent proportion or a large proportion of customers who keep doing in and out of the network, which impacts the VLR being lesser. So this VLR percent, if I look at some of the circles, are upwards of 93%, 92%, but in certain circles, it pulls us down by 80%. And hence, it remains that in the range of 88%, 87%. So that's the answer to the VLR.

So if I understand correctly, it's not as if these are inactive subscribers. It is just that there may be multi-SIM users who are sort of, maybe some of them are not using [indiscernible], the number as frequently to fall within the VLR [indiscernible]. Is that -- is my understanding correct?

Primarily yes, Gaurav. Primarily, yes, they could be because, obviously, some of them will fall into inactive and hence, then the churn out and which kind of gives the delta be a larger churn. But primarily, these are not the inactive customers. They are the customers who are even out of the network depending upon their experience and the users.

And just a follow-up. So this sort of shifting customers, this would be 4G or these would be more current 2G customers?

So this will be a mix of both actually 2G and 4G. So depending upon which geography and which circle are we looking at. Depending upon how the experience is.

Next question is from the line of Balaji Subramanian from IIFL.

I have two questions. The first one is on the subscriber growth side, while we can see and understand the different levers that you have for ARPU and you have clearly articulated that as well. How do you see the subscriber growth going forward? The context I'm asking is this. So we have 2 strong operators who have reached fairly close to their steady-state subscriber market share. And from there on, what is your strategy to grow the subscriber rate? Is it going to be churning customers away from them? Does that mean that we are going to see a higher marketing spend across the industry? And the second question would be on what exactly -- how do you plan to make the Spectrum payout some FY '28 onwards. FY '27 looks fairly manageable because based on whatever client commitment that you might end up receiving and the promoter equity inclusion. But going forward, especially in case there is no further equity issuance and no meaningful conversion of any Spectrum debt into government equity, how do you plan to tackle those?

Thanks, Balaji. I'll take the first one on the subscribers. So 4 clear levers on the subscriber addition. First is, obviously, as I spoke, some of your colleagues asked on the base part. So one part of our, as you know, our base churn is 4.3%, which is pretty significantly higher than the others. The moment we start putting in the network and the capacity, we clearly see that to be coming down. We are targeting a 0.5%, 0.6% reduction in the churn. So that's one lever on the customer addition for which I really don't have to go out and look in the market. Second part on the subscriber addition is the new population that I'm adding. Over the last 6 quarters, we have added 125 million more population in the area where we have covered. Over the next I'll say, 1 year, 1.5 years, when we add another 60,000, 70,000 sites on the 4G, that's another 125 million. So that makes it roughly around 250 million more population, which I'm not covering. So that's the second lever for me to have the group, which is a territory where I'm not present today. Third, I spoke about the MLP, which is obviously, I'm participating in that market, but I'm not really fairly represented in that market. And that's the third one. And that's linking to your point on saying that, we're really taking customers from others. I think if you obviously know the market, roughly 1.4-odd crores customers every month is in the market, in the MLP segment to be acquired. I think we play a very small part there with some 3-odd million customers. So there is 1.1 crore customers in the market, which is shifting side between the 2 operators. So I think that's the third lever, which is clearly there. And the last one is where we are going to put network or where we already have network, we have been over leveraging the network on the gross acquisition, which I touched upon briefly, which really means that your quality of customer that you acquire is not as good as probably the other operators. And we are now focusing very clearly on making sure that our quality of customer is as per the industry standards, which we see as an opportunity. So these 4 things put together is what the strategy is on the customer acquisition. As far as on the higher spend because of the customer acquisition, no, the answer is no. We will rather put per sub cost of acquisition to be lower than this year. But yes, if there is a volume variance, which happens as compared to this year, those costs will go up. I would rather be focusing more, which is, again, one of the stated strategy that we discussed is on the brand reappraisal. And I think that's one area, an opportunity for us to see is now that the vicious cycle of losing customer confidence because of the AGR overhang. Once that is kind of now conclusively behind us, we see a very, very clear opportunity, and the gap in the market to put and reappraise our brand and its position. So you will see some heightened activity on that front, but definitely not in the market to kind of participate in the market if I'm not really getting the quality customer.

Balaji?

I think that answers my first question. If I can have a quick follow-up. So when you said the second point on expanding population coverage. So I would presume that there would be at least 1 of the other 2 large competitors there, right? So that also would improve some bit of churning away from them, assuming that MLP-led gains there. So is that a fair statement?

Yes, there will be some part of that in those areas because obviously, there are only 2 players available or 1 player available, and the market is large. I'll be able to participate in that area.

Yes, that answers my first question, in the case, yes, on the second?

So on your question on the Spectrum payout, right? I think right now, we are not looking at any kind of change or adjustment in that Spectrum payout. I mean to your question, how are we looking to pay this? I think if I can just simply articulate, let's say, over the next 3 years, and I think we've got numbers or discussions that we've had probably in the past as well. If you look at our CapEx ambition, we want to spend INR 45,000 crores of CapEx over the next 3 years, which is INR 7,000, INR 15,000, INR 27,000. This is the Spectrum I have to pay that makes it INR 49,000. And then I have to also service my debt that I'm taking. So let's say another, say INR 5,000, INR 6,000 odd. If you add all that, that's about INR 1 lakh crore. I'm starting this year with a cash balance of more than INR 3,500 crores. Now let me look at the cash sources for the next 3 years. As we've shared, we want to really look at tripling our EBITDA. And I think we spoke about the levers as well. That gives me a cumulative cash EBITDA between FY '27, '28, '29 of about INR 60,000. We've spoken about the debt, INR 25,000 crores funded and a rolling LC facility, which we will keep utilizing for the next 3 years. So that gives me another INR 35,000. On top of that, we have the claim settlement. And we have had confidence in our income tax refund that we've also shown in the past, that amount itself will be INR 110,000 in totality with the claim and the IT refund. So that gives you [ INR 105,000 ] plus the opening balance. And I think now what you see in terms of promoter infusion, that will actually go on top of already a positive cash flow. So in that sense, we are very confident that with the bank loan for the CapEx and for the EBITDA addition, we'll be able to fulfill all our obligations across the next 3 years and now the inflation of course is on top. So that is what we have shared, and that's what I would like to say. Hope that helps, Balaji.

Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to Mr. Abhijit Kishore for closing comments. Over to you, sir.

Thank you. Let me wrap up by restating our ambition. As you heard Tejas say, our 3-year targets are unambiguous, sustained net customer addition, double-digit revenue growth and triple the EBITDA. We are backing these targets with INR 45,000 crores of investment, strong promoter commitment and a leadership team that has managed through some of these most challenging conditions in the Indian telecom and [indiscernible] impact. The worst is behind us. The 7 key parameters that we track are already moving in the right direction. The seventh net subscriber addition is narrowing fast. We enter FY '27 with a clear strategy, improving operational momentum and growing confidence in the trajectory ahead. Thank you all for joining us.

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