Vodafone Idea : Imagine the bustling streets of Chennai, Delhi, or Mumbai. A symphony of car horns and conversations blends with the ubiquitous beep of smartphones – a testament to India’s booming mobile revolution. In this landscape, Vodafone Idea (Vi) once reigned supreme, a towering telecom giant boasting millions of subscribers. 

But the past few years have been a rollercoaster ride for the company, with a narrative that shifted from dominance to decline, and now, unexpectedly, to a glimmer of hope. Recently, on New Year’s Day, Vodafone Idea Ltd experienced a notable peak, in speculation suggesting that the government might consider selling its 33% stake in Vodafone Idea to Starlink, Elon Musk’s satellite internet venture, in partnership with the telecom carrier. However, the company swiftly issued a statement, dispelling these claims as false rumors.

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Vodafone Idea Limited (Formerly known as Idea Cellular Limited) is right now the third-largest operator. As per the Telecom Regulatory Authority of India, Vodafone has a market share of approximately 19.62% in terms of subscriptions with a base of INR 23.03 crore subscribers in the first quarter of the fiscal year of 2024.

This article delves into Vi’s turbulent journey, delving into the complexities of their financial struggles, the government’s crucial intervention, and the recent surge in their stock price that has reinvigorated investors.

Vodafone Idea

Business Overview

Vodafone Idea (Vi) boasts a history as rich and dynamic as the country itself. Its roots trace back to two separate journeys: Vodafone India, a global telecom giant that entered the Indian market in 2003, and Idea Cellular, a domestic powerhouse established in 1995. Let’s understand their journey of coming together as one entity

Vodafone Group Plc, a British multinational telecommunications company, has long been a prominent player in the global telecommunications landscape. Founded in 1991, Vodafone quickly expanded its operations to become one of the largest mobile network operators worldwide. Yet, its subscriber base remained smaller compared to the vast ocean of Indian consumers.

On the other hand, Idea Cellular, an Indian mobile network operator, established itself as a significant force in the Indian telecommunications market. Founded in 1995, Idea played a pivotal role in providing affordable and accessible mobile services to a vast population. As one of India’s leading telecom operators, Idea focused on expanding its network reach and enhancing services to meet the evolving needs of its diverse customer base. This mass-market focus resulted in a large subscriber base, but its average revenue per user (ARPU) remained lower than Vodafone’s. What pushed both companies to come together was the entry of Reliance Jio in the Indian market in 2016.

Entry of Reliance Jio – Turbulence in the Telecom Industry

The merger of Vodafone and Idea was largely influenced by the disruptive entry of Reliance Jio into the Indian telecom market. Reliance Jio, launched in 2016, revolutionized the industry by offering affordable data plans and free voice calls, causing a seismic shift in consumer preferences.

The competitive pricing strategy of Reliance Jio created intense price wars and eroded profit margins for existing telecom players, including Vodafone and Idea. The relentless expansion of Jio’s user base exerted pressure on these established players, leading to a significant decline in their market shares and financial performance.

To counter the challenges posed by Reliance Jio’s disruptive tactics, Vodafone and Idea saw strategic merit in joining forces. The merger allowed them to pool resources, share infrastructure, and consolidate their market positions. By creating a larger, more robust entity, Vodafone Idea Limited aimed to enhance its competitiveness, navigate the aggressive pricing landscape, and collectively face the formidable challenge presented by Reliance Jio.

Vi initially held promise with a combined subscriber base of over 40 crore. However, intense competition from Reliance Jio and Airtel, coupled with high spectrum acquisition costs, plunged the company into a debt spiral.

This did not end here. While the company was struggling to adapt itself with the merger and survive the intense competition, the Supreme Court’s ruling in 2019, on adjusted gross revenue (AGR) dues, imposed a significant financial obligation on the telecom companies.

How AGR landed Vodafone into trouble?

The telecom sector in India is mandated to annually pay dues to the Department of Telecommunication (DoT), calculated as a percentage of the Adjusted Gross Revenue (AGR). 

The AGR case emerged from a dispute between telecom players and the DoT concerning the definition of AGR, which determines the volume of range usage and permissible costs telecom providers must pay to the government.

The ongoing disagreement revolves around the AGR definition, a key factor in calculating dues. Telecom providers that time used to pay 3-5% of AGR as spectrum usage charges and 7-8% as licence fees. The DoT asserts that AGR should encompass interest income, dividends, profits from asset sales, insurance claims, and forex gains. 

Telecom companies argued against including non-telecom revenue streams, such as other income gains, in the AGR calculation. However, the Supreme Court disagreed with this and asked major telecom companies like Vodafone Idea, Reliance Jio, Bharti Airtel, and other telecom players to pay dues of around Rs 1.19 lakh crore.

Government Intervention: A Lifeline Thrown

As the company was drowning with crores of dues to be paid, the Government of India announced a reform package. With that, Vodafone opted for deferment of Spectrum and AGR dues as well as conversion of interest arising from such deferment into equity during FY22.

On February 3, 2023, the Ministry of Communications, Government of India passed an order to convert the loan representing the Net Present Value of the interest related to the deferment of spectrum auction instalments and AGR dues into equity shares to be issued to GoI. The company has issued 16.13 billion equity shares at an issue price of Rs 10/- each. 

The promoter holding in the company has come down to 50.4% in FY2023 from 74.99% in FY2022. The Government of India now holds 33.1% of the company. With the backing of the government of India, Vodafone is trying to climb back the ladder. 

Vodafone Idea’s Climb Back Up: Steps Towards a Potential Comeback?

Vodafone Idea (Vi) is clawing its way back from the brink. After a steep subscriber decline, Vi is taking multiple steps to regain its footing. They’re slashing costs through network sharing and strategic workforce adjustments, while wooing customers with competitive data plans and improved service. 

The government’s financial lifeline helps ease the pressure, while Vi is exploring to sell non-core assets and tapping into high-margin markets like enterprise and rural services. 

They’re also revving up their tech game, accelerating 4G rollout and preparing for 5G. Above all, Vi is striving for transparency and innovation to rebuild trust and carve a unique niche in the competitive landscape. Whether they reclaim their throne or forge a new path, Vi’s comeback attempt is a story of resilience in the dynamic world of Indian telecom

With that let’s have a look at the current financials of the company

Vodafone Idea – Financials

Let’s have a look at some of the financials of Vodafone Idea and understand the dynamics of their future.

Once a titan of India’s telecom landscape, Vodafone Idea (Vi) has witnessed a dramatic decline in its subscriber base in recent years. This exodus, marked by empty phone booths and quieter call centres, paints a picture of Vi’s struggle for survival in a fiercely competitive market. 

Let’s have a look at their 4 year subscription rate:

Subscription (in crore)24.20 26.61  28.4833.30
Subscription rate20.68%22.58%24.26%28.40%

According to the Annual reports of the company the subscription rate for the FY23 of vodafone Idea is 20.7%. The company has been experiencing a continuous decline in their subscription rate. However, the percent decline in the last few years has been slightly less. 

The company reported a net revenue of Rs 42,177.2 crore, an increase of 9.5% over the previous year and the net loss after tax of  Rs 29,301.1 crores for Financial Year 2022-23 as compared to 28,245.4 crores for the previous year.

The company had a negative ROCE of 5% in the FY2023 as compared to 6% in the FY2022. As at March 31, 2023, The Company’s net debt increased by Rs 11,892.5 from Rs 1,89,458.8 in FY22 to Rs 2,01,351.3 Crore in FY23.  


The Vodafone Idea saga is a compelling tale of resilience in the face of adversity. The company’s fight for survival, aided by government intervention and internal improvement efforts, offers a valuable case study in corporate turnaround strategies. While challenges remain, Vi’s recent stock surge and focus on strategic improvement present a glimmer of hope for a brighter future. 

The telecom giant’s continued success will hinge on its ability to harness new technologies, optimize costs, and deliver superior customer experiences. Only time will tell if Vi can truly rise from the ashes and reclaim its position as a leading player in the Indian telecom landscape.

What are your thoughts on this? Do you think Vodafone will be able to make a comeback? Let us know your thoughts on this in the comments section below!

Written by Akshita Maloo

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