Vodafone Idea’s net loss for the April-June quarter narrowed to Rs 6,432 crore from Rs 7,674 crore in the preceding quarter, owing to the fall in expenses, especially the finance costs.
Bloomberg had estimated the net losses at Rs 7,639 crore.
Total expenses fell 6.1% sequentially to Rs 17,191 crore. On a year-on-year basis, the expenses fell 7.1%, owing to which losses narrowed from Rs 7,840 crore a year ago. The company’s finance costs fell 12.1% QoQ to Rs 5,519 crore. Vodafone Idea said it has reversed the interest charge of Rs 263 crore accrued earlier. This was after the Supreme Court recently waived interest on the tax demand on annual revenue share licence fee.
Revenues from operations fell nearly 1% q-o-q to Rs 10,508 crore, missing the Bloomberg estimate of Rs 10,655 crore. On a year-on-year basis, the revenue fell 1.4%. Consolidated Ebitda missed the estimates at Rs 4,205 crore and fell 3% sequentially. Bloomberg had pegged Ebitda at Rs 4,257 crore. Ebitda margin contracted 90 basis points to 40% from 40.9% in the preceding quarter.
On the operational front, the average revenue per user (Arpu) was flat sequentially at Rs 146. The reason for flat Arpu can be attributed to absence of tariff hikes during the quarter and loss of subscribers. The impact of the recent tariff hike will start coming from July-September quarter onwards.
VIL lost 2.5 million mobile subscribers, taking its user base to 210.1 million at the end of June. The blended churn of subscribers rose to 4% from 3.9% in the January-March period.
In the April-June quarter, the company’s 4G subscriber base rose by 400,000 to 126.7 million from 126.3 million in the preceding quarter.“Post the recent equity raise, we are in the process of expanding our 4G coverage and capacity as well as launch of 5G services. Some capex has already been ordered and under execution, basis which we expect 15% increase in our data capacity and an increase in 4G population coverage by 16 million by end September,” Akshaya Moondra, CEO, Vodafone Idea, said in a statement.
“Our current capex needs are being met out of equity funds. We are engaged with our lenders for tying up debt funding towards the execution of our network expansion with a planned capex of Rs 50,000-55,000 crore over next 3 years,” Moondra added.
According to Moondra, the recent tariff intervention is a step in the right direction for the industry to move towards better return on investment, as also to improve cash generation to support the large investment requirements. However, further tariff rationalisation is needed for the industry to fully cover its cost of capital, he said.
The company’s average data usage per 4G customer rose to 15.96 GB compared to 15.8 GB in the preceding quarter. Total data volume rose 1% q-o-q to 6.1 billion GB.Total voice consumption on network fell to 0.38 trillion minutes from 0.4 trillion minutes. The average minute of usage fell 3% to 607 minutes.
At the end of the April-June quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) was at Rs 2.09 trillion. The gross debt comprises deferred spectrum payment obligations of Rs 1.39 trillion, AGR liabilities of Rs 70,320 crore that are due to the government, debt from banks and financial institutions of Rs 4,650 crore and optionally convertible debentures amounting to Rs 160 crore.
The company said its debt from banks and financial institutions has reduced by Rs 4,550 crore during the last one year. The bank debt was at Rs 9,200 crore in the year ago period.
The cash and bank balance stood at Rs 18,150 crore billion as of June 30.
The company’s capex spend for the quarter stood at Rs 760 crore up from Rs 550 crore in the preceding quarter.