Vodafone Idea Q4 losses narrow to Rs 6,563 crore amid ARPU improvement

The losses were at Rs 7,022.8 crore in the year-ago period, according to a company filing.

Telecom operator Vodafone Idea's Q4 results
For the full year FY22, the losses narrowed sharply to Rs 28,245.4 crore, from Rs 44,233.1 crore in the previous financial year.

Telecom operator Vodafone Idea on Tuesday reported narrowing of its consolidated losses to Rs 6,563.1 crore for the fourth quarter ended March compared to same period of the previous year, while its realisation per user or ARPU improved sharply on a sequential basis aided by November tariff hikes.

VIL’s losses were at Rs 7,022.8 crore a year ago, as per a company filing.

Its revenue from operations rose 6.6 per cent year-on-year to Rs 10,239.5 crore in Q4 FY22. Seen sequentially, the revenue was up 5.4 per cent supported by tariff hikes effective November 25, 2021, the company said in a statement.

The realisation per user measured in terms of ARPU — a key metric for telcos — rose to Rs 124 for the just-ended quarter from Rs 115 in the prior three-month period.

This translated into a sequential increase of 7.5 per cent in Average Revenue Per User (ARPU), although the company’s subscriber base declined to 243.8 million against 247.2 million in Q3 FY22, primarily due to the tariff hike.

Vodafone Idea CEO Ravinder Takkar said: “We are pleased to announce third consecutive quarter of revenue growth driven by tariff interventions taken in November 2021. While the overall subscriber base has been impacted primarily on account of the tariff increase, the 4G subscriber base continued to grow on the back of superior data and voice experience…” Takkar noted that the company has successfully completed first tranche of fund raising in the form of preferential equity contribution of Rs 4,500 crore from promoters. The company continues to actively engage with lenders and investors for further fund raising, he added.

The company’s overall broadband site tally stood at 455,264 as of March 31, 2022, compared to 452,650 a year ago. It has shut down about 32,000 3G sites during the year while adding over 35,000 4G sites.

As on March 31, 2022, the total debt (including interest accrued but not due) of the group was Rs 1,97,878.2 crore.

The company said as on 31 March, 2022, an amount of Rs 6,813.1 crore has been classified from non-current borrowings to current maturities of long term debt for not meeting certain covenant clauses under the financial agreements.

Further, as a result of earlier rating downgrade, certain lenders had asked the company for increase of interest rates and additional margin money/security against existing facilities.

“The Group has exchanged correspondences and continues to be in discussion with the lenders for the next steps/waivers,” VIL said.

While the overall subscriber base declined, hurt by the tariff increase, the 4G subscriber base continued to surge.
With one million customers added in Q4, VIL’s 4G base now stands at 118.1 million.

For the full year FY22, the losses narrowed sharply to Rs 28,245.4 crore, from Rs 44,233.1 crore in the previous financial year.

Revenue from operations for the year ended March 2022 came in at Rs 38,515.5 crore.

Following the announcement of the telecom reforms package, VIL — in order to improve its liquidity position — had opted for deferment of statutory dues as well as conversion of related interest into equity, in line with the options offered by the government.

“The effective date for calculation of the Net Present Value of the interest being converted to equity is January 10, 2022,” VIL said, adding that it has submitted the required information to Telecom Department and conversion process is expected to conclude soon.

“Further, in line with the announced reform package, on March 29, 2022, the DoT has till date returned the financial bank guarantees amounting to about Rs 160 billion,” it said.

On the preferential allotment, VIL said Vodafone Group has contributed Rs 3,375 crore and Aditya Birla Group Rs 1,125 crore.

Following this, the aggregate shareholding of the promoter group in VIL has increased to 74.99 per cent from 72 per cent.

“Post interest conversion into equity, the government shareholding is expected to be about 33 per cent (36 per cent prior to preferential allotment) while the promoters will hold about 50 per cent on combined basis,” VIL said.

The company also informed that on March 2022, the Telecom Department computed the Net Present Value (NPV) of interest liability on moratorium period amounting to Rs 16,133 crore towards AGR dues and deferred spectrum liabilities as on the date of exercise of option (January 10, 2022) which the company has confirmed on April 14, 2022.

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