Vodafone Idea on Tuesday brushed off competition from rival Bharti Airtel’s newly launched 5G ‘Fast Lane’ postpaid service, saying it sees no threat to its business and has suffered no decline in postpaid subscribers.
The assurance follows a recent clash between the two telecom operators. In May, Airtel launched a priority postpaid offering powered by 5G network slicing technology, which partitions a single physical network into isolated virtual layers to reserve dedicated bandwidth and higher speeds for premium users. In response, Vodafone Idea rolled out a campaign promising equal network priority across its entire customer base, prepaid and postpaid alike.
“As we speak, we don’t see that (Fast Lane) as a challenge… we have enough capacity to provide the experience to our customers—not only postpaid but prepaid as well,” Abhijit Kishore, chief executive officer of Vodafone Idea said during the June earnings call with analysts. “The net addition for us in postpaid has been consistently positive over the past six to eight quarters and it’s growing with no dip,” Kishore added.
Postpaid battleground
The two telecom rivals have long competed fiercely for postpaid subscribers. Boosted by its 5G fast-lane service, recorded its highest-ever quarterly gain in the June quarter, adding one million postpaid users to reach a total base of 30 million.
By comparison, Vodafone Idea’s postpaid base grew by 1.8 million to reach 31.9 million. However, Vodafone Idea’s figures include machine-to-machine (M2M) connections (SIM cards installed in devices like smart meters and vehicle trackers) rather than mobile phone users alone.
According to an analysis by telecom analyst Parag Kar using subscriber data from the Telecom Regulatory Authority of India (Trai), Vodafone Idea’s postpaid subscribers excluding M2M connections was at 10.28 million during the June quarter, down 2.3% from 10.52 million the previous quarter.
“It is seen that the biggest challenge for Vodafone Idea is from Airtel’s Fast Lane. It seems like Airtel is grabbing postpaid users from Vodafone Idea,” Kar said in a video analysis, adding that all eyes will be on whether the operator can protect its postpaid base in the coming quarter.
Kishore, however, dismissed concerns over Airtel’s service, saying Fast Lane has had no impact on business and that Vodafone Idea sees no structural hurdles in its gross user acquisitions or net additions.
Operational turnaround & Arpu gains
Analyst concerns over postpaid competition come even as the company delivered an overall operational turnaround in its latest financial results. On Monday, Vodafone Idea reported a strong June quarter, adding subscribers for the first time in a quarter since India and Idea Cellular merged in 2018. Driven by network expansion and surging data usage, the telecom operator narrowed its losses while delivering growth in both revenue and operating profit.
In the June quarter, Vodafone Idea’s blended average revenue per user (Arpu) grew 1.7% sequentially to ₹177 a month, from ₹174 in the March quarter, driven by network upgrades, 2G to 4G/5G migration, and two extra billing days during the quarter. Its customer Arpu, excluding M2M users, was at ₹195, up from ₹190 in the previous quarter and ₹177 in the year-ago period.
“As far as the Arpu is concerned, we’ve kind of grown by 10%. We expect to keep the same momentum. This is obviously organic Arpu growth, which is where we have a differentiated opportunity between the mix of customers of between a 2G and a 4G, 5G, as well as unlimited voice and unlimited data customers and then between the unlimited data and non-stop hero (plan) which is a differentiated offering for us,” Kishore said.
Debt fundraising & capex rollout
Sharing an update on the potential bank funding the company has been trying to raise, Kishore said, “We have successfully raised our first tranche of funding, ₹6,400 crore, including partial proceeds of ₹1,183 crore from warrants and debt proceeds, including non-funded based facilities through ECB (external commercial borrowing) and Indian private banks.”
is seeking ₹35,000 crore in bank debt, and needs the funds urgently to back a ₹45,000-crore, three-year network expansion plan and to pay ₹49,000 crore in spectrum fees over the same period.
Kishore said the company is in talks with three separate lender groups: a State Bank of India-led consortium of six or seven public sector banks; a cohort of private Indian banks; and a group of foreign banks providing ECBs.
Of the ₹45,000 crore of capex, the company has placed orders for network expansion worth ₹9,000 crore. “In the three-year guidance, I had said around 55,000-57,000 sites on 4G and 86,000-90,000 sites on 5G, so we are on trend. We intend to finish our 4G rollout over the next 18-odd months so that we meet our target in the 17 circles,” Kishore said.
The company has maintained its guidance to grow its cash Ebitda by three times over the next three years. In FY26, the company’s cash Ebitda was at ₹9,200 crore. “I think our guidance for the next three years was 3x of the cash Ebitda, which is obviously built with certain assumptions on the organic as well as some of the price corrections which will happen. That guidance continues and we are moving in the right direction as far as that is concerned,” Kishore said.
On Tuesday, shares of Vodafone Idea ended 0.6% lower at ₹12.84 on the NSE, while Bharti Airtel closed 1.2% higher at ₹1,420.