Expect subscriber losses to reverse soon, says Vi CEO Akshaya Moondra

Vi CEO says talks are on with lenders, who remain in wait-and-watch mode

Vodafone Idea (Vi) expects the ongoing spate of subscriber loss due to the tariff hike to reverse soon, and it continues to upgrade key network infrastructure to ramp up 4G connectivity, CEO Akshaya Moondra said on Thursday.

 

Monthly data shows the telco is “inching towards a position that it was in before the tariff increase,” Moondra told analysts at the post quarterly results call.

 

“However, the impact of BSNL has been there in this quarter, we have seen that impact reversing quite quickly,” he said.

 

Despite adding a record Rs 42,000 4G sites in Q2, the company’s 4G subscriber base was impacted by the tariff hikes, shrinking by 0.8 million to 125.9 million in Q2. Before this, Vi had recorded 11 straight-quarters of 4G subscriber additions.

 

The dip in subscriber numbers, especially in the telco’s key 4G segment, was a result of port-outs to state-owned telecom operator BSNL, which did not participate in the hike in tariffs by private telcos Reliance Jio, Bharti Airtel and Vi in July. After losing subscribers for nearly two years straight, state-owned telecom BSNL added 2.9 million and 2.53 million users in July and August respectively.

 

Moondra said the telco’s current cash and bank balance is sufficient for executing the planned capital expenditure of Rs 8,000 crore in the second half of FY25. The telco has outlined a capex plan of Rs 50,000– 55,000 crore over three years, executed through debt fundraising and equity raises. While the company is focussed on increasing 4G coverage, Moondra said it is difficult to predict when this would turn around the losses.

 

On Wednesday, Vi reported a net loss of Rs 7,175 crores in the second quarter (July-September) of FY25 (2024-25), which was 17.8 per cent lower than the Rs 8,737 crore loss seen in the corresponding quarter of FY24. On a sequential basis however, the firm’s net loss was 11.5 per cent higher than the Rs 6,432 crore loss in Q1. 

Q2 was the second consecutive quarter where the financially beleaguered telco managed to cut its headline loss figures. This was mostly due to the telco’s tax expenses steeply falling to justRs 7.8 crore in Q2, down from Rs 817.7 crore in Q2 FY24.

 

Fundraise 

Moondra has said lenders are in a wait-and-watch mode, and keeping a close eye on the government’s response to pending dues in the adjusted gross revenue (AGR) issue.

 

“As any interested party, the lenders are also looking at what is happening on the AGR matter. However, it was not a part of our business plan that we submitted to them for debt funding. So we are engaged with the banks…I, along with my promoters, are engaged with the bank and we should be able to close once some clarity emerges as to what is happening on the AGR,” he said.