As he takes charge as chief executive officer of Vodafone Idea (Vi) on August 19, Abhijit Kishore will be stepping into one of India Inc’s toughest corner offices. Kishore will inherit a cash-strapped, highly indebted business, one that is battling subscriber losses because it simply can’t match the services of its rivals.
Kishore joined Vodafone, a decade back, before the merger with Idea, and was serving as COO of the beleaguered telco. To that extent he is familiar with all its problems but is unlikely to be able to resolve any without help from the government.
Mounting debt leaves little room for upgrades
For one, the paucity of funds will stall a meaningful upgrade of Vi’s services leaving it behind its rivals and unable to arrest subscriber losses. While CEO Akshya Moondra had planned for a Rs 55,000 crore capex cycle over the next three years, much of it towards 4G densification and 5G rollout, this hinges on the availability of fresh debt and equity. The telco did however, spend Rs 9,570 crore last year on capex, having guided for Rs 10,000 crore. However, sustaining this could be difficult given the company’s debilitated balance sheet.
As on June 30, 2025, Vi owed the government Rs 1.99 lakh crore and banks and foreign investors Rs 1, 945 crore, down from Rs 15, 080 crore in June 2022. Cash and bank balances were Rs 6, 830 crore. In 2024, Vi raised Rs 18,000 crore via a follow-on public offer. Earlier this year, the board approved a fund-raise of Rs 20,000 crore but there has been no action taken on this front. There is also no clarity on further relief from the government which holds a 49% stake in the telco.
Vi’s writ petition in the Supreme Court, asking for a waiver of dues to the tune of Rs 45, 457 crore, was rejected earlier this year. However, the apex court judges said the government can take steps to aid the telco if it deems it appropriate to do so.
The AGR installment amounting to Rs 16, 428 crore, for which moratorium was taken under the 2021 telecom reforms package, is payable in FY26, as is a payment of Rs 2,641 crore towards deferred spectrum dues, bringing back large obligations just as Vi needs to step up spending on network upgrades.
Playing catch-up in 4G and 5G rollout
While Bharti Airtel and Reliance Jio are racing ahead on 5G expansion, Vi’s rollout has been tentative. By mid-2025, Vi had launched 5G services in just 22 cities across 13 circles, compared to pan-India coverage claimed by peers. The company also trails in 4G coverage, which continues to hurt its ability to retain and attract higher-value subscribers.
Even as Vi attempts to play catch-up on the 5G mobility front, peers Airtel and Jio are already aggressively pursuing the fixed wireless access (FWA) opportunity to capture the higher Arpu (average revenue per user) home broadband market. Vi, meanwhile, is yet to make a play for this lucrative market, and may end up being a latecomer much as it has happened with its 5G roll-out.