Vodafone Idea CEO says ARPU in India lowest globally; industry needs to move towards pricing model

During VIL's investor call post-Q4 and FY25 earnings, Moondra said the average revenue per user (ARPU) in India is the lowest globally and that the industry's returns are below the cost of capital.

The VIL top boss stressed that the industry needs to move towards a pricing model, where heavy data users contribute more proportionally to their higher usage, than the current pricing structure -- where incremental data usage comes at an extremely low, unsustainable price.

On the AGR issue, Moondra said the telco continues its engagement with the government to find a solution.

"As far as the government relief is concerned, I think we are engaged with the government... what the government will do, I cannot comment on their behalf. But definitely post the judgment, we continue with our engagement with the government to find a solution to the AGR matter," he said.

On whether the SC's move would allow the government to offer support to the company or specific clarity would be needed for the Centre to proceed further, Moondra said: "So our view is that the government can do..."

At the time when the 2021 reforms package was announced, there had been some PIL filed in the Supreme Court, Moondra said and added that even then, the apex court had taken the view that it is a policy matter that is within the purview of the government.

"And that time, also the Supreme Court had, when their final order was given, they had stated to the effect that this is a policy matter which is within the purview of the government, and they would not interfere in it. So in some ways, if you look at the reforms package of September 2021, the government has taken the initiative, and I see no reason why the government should be constrained in any way to offer relief, which it decides to do," Moondra claimed.

Moondra clarified that the government does not intend to take a position on the company's board given its 49% stake at present, post recent dues to equity conversion.

"There is no intent to take up any board seat, the shareholding of the government is a consequence of the government providing support in reducing dues," he said.

The comment assumes significance as the embattled telecom operator had been seeking waiver of around ₹30,000 crore AGR dues, as it struggles with statutory liabilities and dwindling subscriber base -- as per the latest subscriber data by TRAI, the mobile customer base of VIL shrunk 6.47 lakh in April to 20.47 crore.

Last month, the Supreme Court dismissed its plea, dealing a big blow to the crisis-ridden telecom operator. Just weeks before that, VIL had sent an SOS to the telecom department stating that without the government's timely support on adjusted gross revenue or AGR, it would not be able to operate beyond FY26, as the bank funding discussions would not move forward.

Vodafone Idea Q4 Results

The debt-ridden telco on Friday, May 30, reported narrowing of losses for the March quarter to ₹7,166.1 crore and its board greenlit fundraising of up to ₹20,000 crore subject to shareholders' approval and statutory nods.

VIL said that the recent dismissal of its plea on AGR dues relief by the Supreme Court does not preclude it from further engaging with the government based on its foreseeable cash flows to arrive at an appropriate solution on this issue.

The revenue for the fourth quarter (Q4FY25) rose 3.8% year-on-year (YoY) to ₹11,013.5 crore. The Q4 losses narrowed to ₹7,166.1 crore for the just-ended quarter, from ₹7,674.6 crore recorded a year ago.

The average revenue per user (ARPU) -- a key monitorable for telecom companies -- stood at ₹175 for the quarter against ₹153 in Q4FY24, the year-on-year growth of 14.2% was driven by tariff hike and customer upgrades, the company said in its earnings release.

As of March 2025, the group's outstanding debt from banks (including interest accrued but not due) is ₹2345.1 crore, and deferred payment obligation towards Spectrum which is payable over the years till FY 2044, and towards AGR which is payable over the years till FY 2031 adds up to ₹1,94,910.6 crore.

Further, the company's board approved the fundraising of up to ₹20,000 crore, subject to a nod from shareholders, and regulatory/statutory approvals.