Vodafone Idea, India’s third-largest telecommunications operator, seems to have ushered in a turning point. After obtaining a ten-year deferred repayment of its Adjusted Gross Revenue (AGR) debt from the government, Vodafone Idea has announced a capital expenditure plan of INR 450 billion (USD 4.89 billion) for the next three years.
This capital expenditure will be used for network expansion and modernization upgrades. Vodafone Idea plans to expand its 4G and 5G network coverage to curb user churn. In addition, the company also plans to launch 5G fixed wireless access (FWA) services for the small office/home office (SOHO) market. Fixed wireless access has become one of the most critical application scenarios for Vodafone Idea’s competitors, Bharti Airtel and Reliance Jio, to realize 5G monetization. Previously, due to uncertain future prospects, this heavily indebted telecommunications operator had been unable to obtain financing from financial institutions.
The company plans to expand its 4G network coverage to a level comparable to its competitors in 17 key service areas within the next 12 to 24 months. In addition, it is planned to expand 5G network coverage to urban areas with a population of 20000 or more in the next 12 to 30 months. About 70% of the capital expenditure will be used for wireless access networks (RAN), with the remaining portion allocated to transmission and core infrastructure.
The company stated that the capital expenditure funds will mainly be raised through debt, with the goal of obtaining 250 billion Indian rupees (2.72 billion US dollars) in bank loans and 100 billion Indian rupees (1.08 billion US dollars) in non-financial credit lines. Vodafone Idea has currently ruled out the possibility of equity financing, stating that the current financing structure is sufficient to support the investment plan.
This is an important step in Vodafone Idea’s process of turning losses into profits. The lagging modernization and upgrading of the network is a key factor in the company’s continuous loss of users. Although the three-year investment of 4.89 billion US dollars cannot compare to the annual capital expenditure of 300 billion Indian rupees (3.26 billion US dollars) by Bharti Telecom, for Vodafone Idea, which has been struggling for many years, this is a meaningful beginning to the recovery process.
The improvement of network coverage and the enhancement of customer experience help to raise its average revenue per user (ARPU) to a level close to that of its peers. In September 2025, Vodafone Idea’s ARPU was 186 Indian Rupees ($2.02), while Bharti Telecom’s ARPU was 256 Indian Rupees ($2.78); Reliance Jio reported an ARPU of 213.7 Indian Rupees ($2.32) in its December quarterly report.