Vodafone Idea on Thursday said its net loss rose 4.1% quarter-on-quarter to Rs 7,595.5 crore during the July-September quarter owing to higher finance cost and network operating expenses. In the previous quarter, the company had reported a net loss of Rs 7,296.7 crore.
The telco missed Bloomberg consensus estimates which had expected its net loss to narrow down to Rs 6,974.90 crore.
The debt-laden company’s consolidated revenues rose nearly 2% sequentially to Rs 10,615 crore, marginally beating estimates, thanks to 4G subscriber additions and an increase in average spends by consumer on its network. Bloomberg estimates had pegged the revenue at Rs 10,518.90 crore.
Consolidated Ebitda missed estimates at Rs 4,097.5 crore and was down 5.3% compared with the preceding quarter due to weak growth in revenues and higher expenses. The Ebitda margin contracted to 38.6% from 41.6% in the preceding quarter.
“We are pleased to report a fifth consecutive quarter of revenue growth and 4G subscriber addition. Such performance is primarily driven by the continued increase in 4G subscriber base on the back of superior data and voice experience offered by Vi GIGAnet,” CEO Akshaya Moondra said in a statement. “We continue to remain engaged with our lenders and investors for further fundraising to make the required investments for network expansion and 5G rollout,” he added. Owing to weak financial performance during the quarter, high debt levels and a muted cash flow position, auditors of Vodafone Idea continue to flag uncertainty over the company’s ability to continue as a going concern.
“The company’s ability to continue as a going concern is dependent on its ability to raise additional funds as required and successful negotiations with lenders and vendors for continued support and generation of cash flow from its operations that it needs to settle its liabilities as they fall due. Our conclusion is not modified in respect of this matter,” auditor SR Batliboi and Associates said.
At the end of the July-September quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) rose to Rs 2.20 trillion, comprising deferred spectrum payment obligations of Rs 1.36 trillion, AGR liabilities of Rs 68,590 crore that are due to the government, and debt from banks and financial institutions of Rs 15,080 crore.
Due to a weak financial position and rating downgrades, the lenders have also been asking for an increase in interest on dues, the company said.
On the operational front, Vodafone Idea’s average revenue per user (Arpu) saw a jump of 2.3% quarter-on-quarter to Rs 131 compared with Rs 128 in the preceding quarter. The growth in Arpu can be attributed to an increase in 4G customer additions and migration of subscribers to unlimited plans.
During the quarter, Vodafone Idea continued to lag behind peers Bharti Airtel and Reliance Jio on data usage per customer. The company’s data usage per customer was at 15.37 GB whereas that of Jio was 22.2 GB and Airtel was at 20.76 GB. However, the growth in Vodafone Idea’s data usage per customer was 5%, which was higher than 4.2% growth of Bharti Airtel during the September quarter.
Like its peers, Vodafone Idea witnessed a fall in the minutes of voice usage per customer per month on the network. The company’s minutes of usage on the network fell 3.4% sequentially to 599 minutes.
Vodafone Idea’s monthly churn of subscribers also increased to 4.3% compared with 3.5% in the preceding quarter. The company lost 6 million mobile subscribers, taking its subscriber base to 234.4 million at the end of September.
In the September quarter, however, the company’s 4G subscriber base increased to 120.6 million, a jump of 1.3% quarter-on-quarter.
Vodafone Idea is the only operator which has not declared its plans for a 5G rollout yet. The company also awaits conversion of its interest dues worth Rs 16,133 crore into equity by the government as part of the relief measures.
Further, its issuance of optionally convertible debentures amounting to Rs 1,600 crore to its vendor ATC India is also dependent on the government’s equity conversion and shareholders’ approval, the company said.
On Thursday, Vodafone Idea’s shares closed up 0.1% at Rs 8.57 on the BSE.