Vodafone Idea's funding delays may erode market share in top circles

A potential delay in Vodafone Idea’s targeted Rs 50,000-55,000 crore capex spends to bolster its 4G and 5G operations could result in Bharti Airtel and Reliance Jio cornering revenue and customer share in the loss-making telco’s seven biggest markets that generate 50% of its revenues, analysts said.

Industry experts expect the financially stronger Jio and Airtel to step up capex spends to specifically poach customers and grab market share from Vi in these seven key circles amid the latter’s continuing fundraising challenges.

At present, Vi has over 20% gross revenue market share (RMS) in Mumbai, Kerala, Gujarat, Haryana, Kolkata, Maharashtra and UP-West circles, which collectively garner 50.2% of the telco’s revenues as per Trai data.

By contrast, Airtel and Jio’s current revenue contribution from these circles is much lower at 24.5% and 29% respectively as per data collated by the telecom regulator for the quarter ended December.



“Any delay to Vi’s network strengthening (4G and 5G rollouts) in these seven circles could pose a downside risk for the telco’s market share. It is likely that Airtel and Jio would increase their capital investment in these seven circles to strengthen network capacity and quality of service to gain market share,” HSBC Global Research said in a research note.

The brokerage added that Vi’s subscriber market share has declined to 17% in FY25 — from 21% in FY22 — as the telco’s network investments have lagged peers.

Motilal Oswal recently cautioned that the absence of relief on the adjusted gross revenue (AGR) dues front — with repayments set to commence from March ‘26 — and an absence of a breakthrough on the debt-raise could result see in Vi facing an estimated annual cash shortfall of Rs 20,000 crore, and accordingly, being unable to meet its ambitious Rs 55,000 crore capex guidance over FY25-27.

The telecom JV between UK’s Vodafone and India’s Aditya Birla Group is yet to close its pending Rs 25,000 crore debt raise from banks, which is critical for it to execute its mega capex plans to ramp up its 4G operations in priority circles and rolling out 5G in key cities. The telco needs to quickly reinforce its mobile broadband operations to narrow network coverage gaps with its bigger rivals and rein in customer losses.

In fact, the telco’s targeted 90% 4G population coverage, which entails around 220,000 broadband sites, now hinges on lining up its long pending debt-raise.

To be sure, Vi has been rapidly expanding 5G coverage since launching the next-gen wireless broadband service in March. On Tuesday, Vi announced the launch of 5G services in Bengaluru. It has already rolled out 5G in Mumbai, Delhi, Chandigarh and Patna, and plans to expand its next-gen mobile broadband coverage in key cities across its 17 priority circles by August 2025.

Analysts at CLSA said India’s top two telcos, Jio and Airtel, had a combined 81% of sector revenues in FY25, which is estimated to rise further to 85% by FY27, underlining their continued dominance. “Market share shift away from Vi continued in FY25 with a loss of 1.6 ppt (percentage points) on-year to 14.1%. Vi has lost 27 ppt RMS from the peak in FY17.”