New Delhi: Telecom operator Vodafone Idea has laid out an ambitious roadmap for its future growth, announcing a massive ₹45,000-crore capital expenditure plan as part of its Vi 2.0 strategy. The company is targeting double-digit revenue growth, a three-fold increase in operating profit, and sustained subscriber additions over the next three years.
Massive Network Investment Plan
At an analyst meet held in Mumbai, company executives revealed that this proposed investment, when combined with the ₹18,000 crore already spent over the past six quarters, would bring Vodafone Idea's total network investment to over ₹60,000 crore over a four-and-a-half-year period. This substantial financial commitment signals the company's determination to strengthen its market position in India's competitive telecom landscape.
AGR Relief Provides Breathing Space
Abhijit Kishore, Chief Executive Officer of Vodafone Idea, emphasized that the company has moved past the AGR (Adjusted Gross Revenue) overhang that had been weighing on its operations. "AGR overhang is behind us... I think to my mind it (relief from the government) is a definitive conclusive long-term solution with a very clear visibility on our cash flow," Kishore stated during the analyst meet.
The comments come at a crucial time for Vodafone Idea, which recently received significant relief from the government regarding its AGR dues. The Cabinet decision on December 31 to freeze the company's ₹87,695 crore in AGR dues as of December-end has provided the telecom operator with much-needed financial breathing room.
Network Expansion Strategy
Kishore detailed how the capital expenditure will be directed toward network expansion. The telecom operator plans to achieve 4G parity with its competitors across its 17 priority circles within 12 to 24 months. These priority circles contribute over 99% of the company's revenue, making this expansion critical for its financial performance.
Simultaneously, Vodafone Idea will expand its 5G coverage across urban markets with populations above 20,000 over the next 12 to 30 months. This dual approach of strengthening 4G infrastructure while expanding 5G capabilities reflects the company's comprehensive strategy to cater to both current and future connectivity needs.
Exploring New Business Opportunities
The company is also looking to diversify its service offerings. Kishore mentioned exploring opportunities in the fixed wireless access (FWA) space using 5G technology. "FWA which is on the 5G we would definitely want to get into the SOHO (small office home office) and the home space which we are not present right now. We are looking at some options and opportunities as far as getting an entry into a small office or home office is concerned," he explained.
Financial Impact of AGR Resolution
Kishore acknowledged how the AGR situation had previously hampered the company's operations. "The AGR overhang meant funding was not available. Without funding, investments and deployments suffered. That hurt network experience, impacted brand perception and led to subscriber losses," he noted, adding that the company expects to soon move past negative customer additions.
Following the AGR dues freeze, Vodafone Idea's total outgo toward AGR payments over the next six years, from March 2026 to March 2031, would be ₹744 crore, with a maximum of ₹124 crore per year. Additionally, the company will have to pay ₹100 crore annually over four years, from March 2032 to March 2035.
The government has approved a payment plan for the company to clear its frozen AGR dues over FY32-41. As per Supreme Court orders in October and November, the government has also begun reassessing the company's AGR dues, providing further clarity on the financial obligations ahead.
This comprehensive strategy announcement marks a significant turning point for Vodafone Idea as it seeks to leverage the AGR relief to rebuild its network infrastructure, expand services, and regain market share in India's fiercely competitive telecommunications sector.
