Vodafone Idea now has greater financial clarity, says Chairman Birla

Birla outlines objectives for VI: Execute network investments, strengthen market competitiveness and grow customers and earnings

Vodafone Idea (Vi), the third-largest telecom operator in India, will focus on three priorities in FY27 — executing its network investment programme, strengthening market competitiveness and driving growth in customers and earnings — after resolving key financial overhangs in FY26, said Kumar Mangalam Birla, the chairman of the Aditya Birla group, in the company’s FY26 annual report. 

Birla, also Vi’s non-executive chairman, said the company had emerged from its “most challenging years” with greater financial clarity, continued promoter backing and renewed capacity to invest. “FY26 was a year of resolution. FY27 begins a period of execution,” Birla said in his address to shareholders in the annual report issued on Wednesday. “The priorities ahead are clear: Execute the network investment programme, strengthen market competitiveness and translate a stronger balance sheet into sustained growth in customers and earnings.” 

 

He also pushed for “periodic tariff adjustments”, terming them as “essential” for telecom companies to sustain investment and finance the rollout of next-generation networks. 

FY26 was not only a “milestone year” for Vi, but also a “turning point” for the telecom operator after years of financial uncertainty, Birla said, with several longstanding issues — including the adjusted gross revenue (AGR) matter — reaching resolution. The Department of Telecommunications finalised Vi’s AGR dues at ₹64,046 crore, substantially below the earlier provisional estimate of ₹87,695 crore, providing clarity on the company’s long-term repayment schedule. 

The company said it was confident of generating sufficient operating cash flows over the next 12 months to meet obligations to lenders as well as spectrum and AGR payments as they fall due. 

Vi’s revenue rose 3 per cent to ₹44,873 crore in FY26 from ₹43,571 crore a year earlier. Ebitda increased 4.8 per cent to ₹19,003 crore, while the Ebitda margin expanded to 43.1 per cent from 41.6 per cent, reflecting disciplined cost management and steady revenue growth. 

Birla said improving operating performance strengthened investor and lender confidence during the year.  

The telco raised ₹3,300 crore through non-convertible debentures ahead of the AGR resolution, alongside continued support from its promoter groups. 

“Promoter support remained unequivocal,” Birla said. The UK-based Vodafone group completed settlement of the Contingent Liability Adjustment Mechanism receivable of ₹6,394 crore, while the Aditya Birla group committed an additional equity infusion of $500 million (about ₹4,730 crore) through fully convertible instruments. 

“Continued support from promoters, stronger credit ratings and a return to positive subscriber additions together provide a firmer platform for the next phase of growth,” he said. 

The Aditya Birla group’s chairman also reiterated the need for “periodic tariff adjustments”, calling them essential to sustain investment and fund next-generation network rollouts. He noted that while India has more than 1 billion mobile connections, average revenue per user (Arpu) remains among the lowest globally. “Maintaining a financially viable and competitive telecom industry — supported by sustained investment from both private operators and the public sector — will be central to India’s next phase of digital transformation,” he said. He added that resilient, high-quality communications networks would be critical to India’s ambition of becoming a developed economy by 2047. 

The annual report also disclosed contingent liabilities of ₹8,780 crore as of March 2026 relating to one-time spectrum charge (OTSC) for spectrum beyond 6.2 MHz and spectrum usage charge (SUC) demands from FY19 onwards. 

Outstanding borrowings from banks and other lenders stood at ₹4,126 crore at the end of March 2026, with repayments of ₹726 crore due by March 2027. Vi’s deferred spectrum payment obligations stood at ₹1.27 trillion, while AGR liabilities were ₹25,254 crore. Combined instalments due towards spectrum and AGR in FY27 total ₹7,076 crore.