Vi announces strategic reset, to invest ₹45,000 cr over next three years

KM Birla says AGR overhang resolution a turning point for telco's revival

Vodafone Idea will invest about ₹45,000 crore over the next three years, said chief executive Abhijit Kishore on Wednesday, as India’s third-largest telecom operator unveiled a strategic reset under its VI 2.0 plan. The new strategy focuses on network expansion, profitability and customer retention, with what the company described as the “biggest overhang” of adjusted gross revenue (AGR) dues now behind it.

 

Under the reset, the Aditya Birla group-backed telecom services provider is targeting double-digit revenue growth, a threefold increase in cash Ebitda (earnings before interest, taxes, depreciation and amortisation) and sustained subscriber additions over the next three years. The shift follows the resolution of the long-running AGR dispute, which Kumar Mangalam Birla, chairman of the Aditya Birla group, has described as “a decisive turning point” that removes years of uncertainty and allows the company to move beyond survival.

 

Vodafone Idea said it had emerged from a “vicious cycle” in which the AGR issue had prevented it from securing funding and, in turn, investing in the business. “This really marks the beginning of a new era for VI… The only and the biggest overhang… in a vicious cycle was AGR, which is now behind us. The game is now to move from survival and suspicion to strength. So for all practical purposes, it is a reset for VI, a VI 2.0,” said Kishore at an investor conference in Mumbai.

 

The telco will effectively invest more than ₹60,000 crore over a four-and-a-half-year period following its follow-on public offering in April 2024, exceeding its earlier capital expenditure plan of ₹50,000–55,000 crore announced last year. Since the FPO, the company has invested ₹16,000 crore over the past seven quarters.

 

Of the new capex, ₹25,000 crore will come from bank funding and ₹10,000 crore from non-funded facilities. The company is not considering a fresh equity infusion to bring in a strategic investor, said Kishore while responding to analysts’ questions at the conference.

 

“We are not really looking at any equity infusion right now in the business… these investments will yield a particular level of Ebitda which then kind of takes care of both the capex that is required,” he said, adding that both promoters — Vodafone PLC and the Aditya Birla group — were committed to the business.

 

Investments will be front-loaded towards expanding 5G coverage, achieving 4G parity with competitors in 17 priority circles over the next 12–24 months, gaining ground through fixed wireless access (FWA), and launching satellite communication services through its tie-up with AST, albeit at a later stage.

 

Kishore added that the reassessment of AGR dues, frozen at ₹87,695 crore as of December 31, 2025 for the period from FY07 to FY19, was progressing at an “encouraging pace” and that the company was engaging with the government at multiple levels.

 

Under the terms of the AGR settlement, Vodafone Idea is required to pay ₹124 crore annually for six years starting March 2026, followed by ₹100 crore annually for four years, and the reassessed AGR balance in six annual instalments from FY36 to FY41. This effectively provides the company with a 10-year breather and time to re-establish itself in the market.

 

Birla said the resolution of the AGR issue would serve as the foundation for the company’s revival. “The recent resolution of the AGR issue marks a decisive turning point. With long-standing uncertainty removed through the clarity of the Honourable Supreme Court’s judgment and the government’s decisive intervention, the operating environment has fundamentally changed. For the first time in years, the fog has cleared, allowing the business to look beyond survival, and focus on sustainable growth,” he wrote in his annual letter, My Reflections, on Wednesday.

 

“A dogged focus on daily operations, service and network expansion, will now serve as the foundation for revival. A healthy, competitive telecom industry is essential to India’s digital future. India deserves three private telecom players,” he said, highlighting the government’s crucial support in revitalising the Indian telecom sector.

 

Kishore added that the company was not seeking a moratorium or deferment of spectrum liabilities, which stand at ₹49,000 crore over the next three years, and would be met through Ebitda expansion, operational efficiencies and bank funding.

 

“We are in a comfortable position to pay up the spectrum as well as the capex investment through the bank funding,” he said, adding that funds of ₹6,400 crore from the contingent liability adjustment mechanism (CLAM), to be provided by Vodafone PLC, were also available to the company. Vodafone Idea has to pay ₹7,000 crore, ₹15,000 crore and ₹27,000 crore over the next three financial years.