Vodafone Idea Looking For Non-Banking Funding Sources For Capex Continuity: CEO

Debt-ridden Vodafone Idea is looking to raise funds from non-banking sources to maintain continuity of its capex plan, a top official of the company said on Monday.

During the company's earnings call for June 2025 quarter, Vodafone Idea chief executive officer Akshaya Moondra said that the banks are looking for clarity on the adjusted gross revenue matter before issuing debt to the telco.

"Given the fact that we are keen on maintaining a continuity of our capex, which has been going on since last year, we are looking at non-banking sources of funding also. Not the full amount of Rs 25,000 crore that we have talked about, but a lesser amount so that we can continue with the capex cycle," Moondra said on his last day as chief executive officer of the company.

The Vodafone Idea board approved the elevation of Chief Operating Officer Abhijit Kishore to the position of Chief Executive Officer with effect from Aug. 19. He will replace Moondra, whose three-year tenure as CEO ends on Aug. 18.

Moondra said that the company continues to engage with banks for credit.

"I think what the banks are currently looking for is some clarity on the AGR front. So that is where we are engaged with the government. Given that the government has made the conversion, they are today the largest stakeholder in the company. Whether as an equity holder or any dues which are owed to any external party, we are quite confident that there will be a solution to AGR," he said.

VIL, in which the government holds a 49% stake, has reported an outstanding net debt of over Rs 2 lakh crore and the firm continues to bank on the Department of Telecom support on AGR related matters.

The company's AGR liability at the end of June 2025 quarter stood at around Rs 75,000 crore.

Vodafone Idea, along with other players like Bharti Airtel, BSNL, MTNL etc., had contested claims of the Department of Telecom on the definition of AGR. After several years of litigation, the Supreme Court in October 2019 ruled in the favour of the DoT and asked the telcos to clear entire dues as claimed by the government.

Moondra said that the government has always supported the company closer to the dates of transaction time when the company had to make payments and expects to resolve the AGR issue with the government this time as well.

"I think in the past, we have always seen that the government has been supportive. You look at 2019, deferment of spectrum installments, 2021 reforms package, 2023 conversion of government dues to equity, 2025 again conversion of used to equity. Generally, these actions have happened closer to the time when it is essentially needed," Moondra said.

The company needs to pay AGR liability in six equal installments post the moratorium period starting from March 31, 2026.

He said that VIL's request to the government has been to resolve the issue before the deadline of March so that banks get clarity and the company can proceed with bank funding.

VIL said that during the reported quarter, improvement in the network with a capex of Rs 2,440 crore enabled it to arrest decline of customers by 90% to 5 lakh compared to the decline of around 50 lakh it registered in September 2024 and December 2024 quarter.

The company's total subscriber base stood at 19.77 crore at the end of June 2025 quarter, comprising a 12.74 crore mix of 4G and 5G subscribers.

The company has rolled out 5G services in 22 cities, including Mumbai, Delhi, Bengaluru, Mysuru, Surat, Ahmedabad etc. and plans to extend it to all cities across its priority 17 circles by September.

Despite arresting decline of subscribers, Vodafone Idea reported widening of its consolidated loss to Rs 6,608 crore in the first quarter ended June 2025, mainly on account of an increase in finance cost and government levies.

VIL's finance cost increased by about 7% or Rs 374 crore on a year-over-year (YoY) basis to Rs 5,892.8 crore from Rs 5,518.6 crore, which added to the loss of Rs 6,426.7 crore it posted in June 2024 quarter, according to a company filing.

The licence fees and spectrum usage charges payable to the government increased by about 6 per cent to around Rs 947 crore during the reported quarter from around Rs 892 crore a year ago.

Revenue from operations of VIL increased by about 5% to Rs 11,022.5 crore during the quarter under review from Rs 10,508.3 crore in the year-ago period, mainly on account of a 15% increase in average revenue per user to Rs 177 in the reported quarter from Rs 154 in June 2024 quarter.