Vodafone Idea loss narrows slightly to Rs 7,132 crore; sees ARPU rise

Revenue falls 12.8% YoY but rises 2.8% sequentially

Vodafone Idea (Vi) posted a net loss of Rs 7,132 crore in the second quarter of FY22 as the telecom company continued to struggle with high finance costs and subscriber loss. In the same period last year, it had reported a net loss of Rs 7,218 crore.

This was the first quarterly result of the company after the government’s reform package — a lifeline for the financially stress­ed firm. While the company did not anno­unce any fundraising, it indicated it is in dialogue with lenders for easier loan terms.

The company’s gross revenue declined 12.8 per cent on a year-on-year basis to Rs 9,406 crore due to fall in subscribers.

Sequentially, revenue rose 2.8 per cent from Rs 9,152 crore. While operating expenses declined on a YoY basis, they were higher sequentially by 1.8 per cent to Rs 5,543 crore.

Earnings before interest, tax, depreciation, and amortization (Ebitda) declined 6.3 per cent on a YoY basis to Rs 3,862 crore in the second quarter. Finance costs rose 9 per cent YoY to Rs 5,082 crore. Vi’s average revenue per user (ARPU) grew sequentially to Rs 109 from Rs 104 on account of price hikes in entry-level prepaid plans and certain postpaid plans.

The company lost 2.4 million subscribers in the second quarter and its customer base stood at 253 million. It, however, managed to trim the subscriber loss when compared with the first quarter, which had seen a decline of 12.4 million customers.

Vi also reported a sequential addition of 3.3 million 4G subscribers to 116.2 million. While sequential growth in data consumption remained flat, it grew 27 per cent on a YoY basis. Data usage per 4G subscriber stood at 14.5 Gb/month, against 11.8 Gb/month a year ago, the company said.

Ravinder Takkar, managing director & chief executive officer, Vodafone Idea, said: “During the last quarter, we witnessed a recovery in our operating momentum as the economy started to gradually open up, aided by the ongoing rapid vaccination drive. We continue to improve our 4G subscriber base on the back of superior data and voice exper­ience on Vi GIGAnet. We continue to focus on executing our strategy to improve our competitive position and win in the marketplace.” On September 15, the Union Cabinet had approved a relief package for the telecom sector that included a four-year moratorium on AGR and spectrum payments. 

It also included reduced bank guarantees and the option of converting interest accruing on dues into equity. While Vi has decided to avail of the moratorium on both AGR and spectrum payments, it has to take a call on the option of converting dues into equity within 90 days.

As of September end, Vi’s total debt stood at Rs 1.94 trillion. In the first half of FY22, the company reported a loss of Rs 14,451 crore and its net worth was negative Rs 52,685 crore.

“As a result of an earlier rating downgrade, certain lenders had asked for an increase of interest rates and additional margin money/security against existing facilities. The group has exchanged correspondence and continues to be in discussion with lenders for next steps/waivers,” the company said in its results filing.