Vodafone Idea on Monday reported a sequential improvement in its financial performance for the July-September quarter, supported mainly by lower finance costs and steady growth in operating revenue. The company posted a net loss of Rs 5,524 crore for the quarter, narrowing from a loss of Rs 6,608 crore in the preceding three months. The loss was also smaller than Bloomberg’s consensus estimate of Rs 6,712 crore.
Finance cost was the main driver of the reduction in losses during the period. These expenses, which include interest outgo on debt and related liabilities, declined 18.8% sequentially to Rs 4,784 crore. The reduction comes in the backdrop of the company’s continued efforts to manage its debt obligations while engaging with lenders on securing additional funding. The company, which holds one of the highest leverage levels in the telecom sector, continues to depend on timely access to financing to sustain network expansion and operational investments.
Revenue from operations stood at Rs 11,194.7 crore, compared with Rs 11,022.5 crore in the previous one, marking a sequential improvement of 1.6%. It was slightly above the Bloomberg consensus estimate of Rs 11,136 crore. The uptick in operating revenue was supported by continued growth in data consumption on the network and the benefit from tariff adjustments implemented earlier. The company has also continued to expand its 4G footprint, which it said now covers more than 84% of the population.
The operator reported earnings before interest, tax, depreciation and amortisation (Ebitda) of Rs 4,685 crore for the quarter, higher than Rs 4,612 crore in the preceding period. The performance was broadly in line with operational momentum and exceeded the Bloomberg estimate of Rs 4,642 crore. Ebitda improvement during the period reflected the strength in revenue alongside cost efficiencies.
Blended average revenue per user (Arpu) rose to Rs 167 from Rs 165 in the previous quarter. However, this remains lower than that of peers. Reliance Jio reported Arpu of Rs 211.4 in the period, rising from Rs 208.8 sequentially, while Bharti Airtel’s Arpu increased to Rs 256 from Rs 250.
Vodafone Idea’s subscriber base stood at 196.7 million at the end of the quarter, compared with 197.7 million in the preceding one. The operator has recorded subscriber losses in recent quarters, although the company noted an increase in its 4G/5G subscriber base to 127.8 million from 127.4 million sequentially, indicative of ongoing customer migration toward higher-speed data services.
As is known, the Supreme Court has recently permitted the government to reassess Vodafone Idea’s adjusted gross revenue dues as of 2016-17. The ruling provides potential relief as the reassessment may influence the quantum of liabilities linked to interest and penalties. Vodafone Idea said it is in discussions with the department of telecommunications on the next steps following the court’s ruling.
The government currently holds a 49% stake in the company. The company remains engaged with lenders to secure debt financing to support its planned capital expenditure of Rs 50,000-55,000 crore. The company said it continues to focus on improving network quality and customer experience as it completes 5G rollout in the circles where it holds spectrum.
