New Delhi, Nov 10 (PTI) Debt-ridden telecom operator Vodafone Idea on Monday said its consolidated net loss narrowed to Rs 5,524 crore in the second quarter ended September compared to the year-ago period, mainly on account of savings in finance cost on debt from banks and an increase in average revenue per user supported by a tariff hike.

Vodafone Idea Ltd (VIL), in its financial performance note, mentioned that its ability to settle debt liability is dependent on government support, fundraise and cash flow generation from operations.

The government holds a 49 per cent stake in VIL.

While an increase in average revenue per user (ARPU) due to a tariff hike helped VIL improve its financial performance, the company continues to record a dip in its subscriber base, both on a quarterly and year-over-year (YoY) basis.

VIL had posted a net loss of Rs 7,176 crore in the year-ago period, according to the company’s regulatory filing.

A 27 per cent decline in finance cost helped VIL narrow its loss. Its finance cost stood at Rs 4,784.4 crore in the September 2025 quarter against Rs 6,613.6 crore a year ago, mainly on account of a reduction in debt from banks.

The company's debt from banks reduced to Rs 1,542 crore in the September quarter from Rs 3,250 crore.

"As of 30th September, 2025, the Group's outstanding debt from banks (including interest accrued but not due) is Rs 15,421 million and Deferred payment obligation (including interest accrued but not due) towards Spectrum which is payable over the years till FY 2044 and AGR which is payable over the years till FY 2031 aggregates to Rs 2,014,090 million," the company filing said.

VIL incurred a loss of Rs 12,132 crore in the first half of the current fiscal and its net worth stands at negative Rs 82,460 crore as on September 30. The total debt of the company stood at Rs 2.02 lakh crore at the end of the second quarter of FY26.

VIL consolidated revenue from operations increased 2.4 per cent to Rs 11,195 crore during the reported quarter from Rs 10,932 crore a year ago.

The customer ARPU (average revenue per user) rose 8.7 per cent year-on-year to Rs 180 in the reported quarter from Rs 166 in the September 2024 quarter, mainly due to customer upgrades and tariff increases, the company said.

The blended ARPU, which includes machine-to-machine connections, increased by about 7 per cent to Rs 167 in the September 2025 quarter from Rs 156 in a year ago.

VIL continued to record decline in customer base. The company reported a 4 per cent decline in subscriber base to 19.6 crore from 20.5 crore a year ago. The postpaid subscriber of the company, however, increased to 2.79 crore from 2.45 crore on a YoY basis.

The average data usage on VIL network grew by about 21 per cent to 18.5 GB per user per month from 15.3 GB a year ago driven by expansion of network especially 5G services.

"We expanded our 4G coverage to over 84 per cent of population and completed the 5G rollout in all 17 circles where we hold 5G spectrum. The growth of around 21 per cent in data volume reflects our ability to retain and engage customers through our differentiated prepaid and postpaid offerings. We are focused on increasing our 4G coverage to 90 per cent population and expanding our 5G footprint in the geographies with growing 5G handset adoption," VIL CEO Abhijit Kishore said in a statement.

The company's capex for the quarter and for the first six months of the current fiscal stood at Rs 1,750 crore and Rs 4,200 crore, respectively.

"We remain engaged with lenders to secure debt financing to support our broader capex plans of Rs 500–550 billion," Kishore said.

The company, during the quarter, received a favourable order from the Supreme Court that has allowed the government to reconsider and take an appropriate decision with reference to the additional AGR demand raised for the period up to the financial year 2016-2017 and comprehensively reassessing and reconciling all AGR (adjusted gross revenue) dues, including interest and penalty.

Vodafone Idea non-executive chairman Ravinder Takkar in a note said that the group's ability to settle its debt liabilities is dependent on reconsideration or re-assessment of AGR dues, including Interest and Penalty up to FY 2016-17 by DoT, fund raise through equity and debt and generation of cash flow from operations.

"Based on current efforts and recent directions by the Hon'ble Supreme Court, the Group believes that it would be able to get DoT support, successfully arrange funds and generate cash flow from operations," Takkar said.

The company has to pay first AGR installment of Rs 16,428 crore in the current fiscal following the end of four years moratorium availed by it under the Telecom Reforms Package 2021. PTI PRS PRS MR

AGR reassessment may affect Vodafone Idea's debt settlement prospects and funding needs after recent financing developments. Vodafone Idea narrowed its consolidated net loss in the September quarter due to lower finance costs from reduced bank debt and higher ARPU from tariff increases, while subscriber counts declined. The company remains dependent on operational cash flow, equity and debt fundraising, and potential government support for meeting obligations. It disclosed significant outstanding bank borrowings and long term deferred spectrum and AGR payment obligations, noted a favourable judicial development permitting AGR reassessment, and highlighted the end of a moratorium creating near term instalment requirements.