"We continue to invest in 4G to increase our coverage and capacity. During the quarter, we added around 10,800 4G FDD sites primarily through refarming of 2G/3G spectrum (shutdown around 9,600 3G sites) to expand our 4G coverage and capacity.
Debt-ridden telecom operator Vodafone Idea Ltd (VIL) on Friday reported narrowing of consolidated loss to Rs 7,144.6 crore for the second quarter ended September 30, on account of an increase in mobile services tariff and cost optimisation.
The company had posted a loss of Rs 7,218.2 crore in the corresponding period of the previous financial year 2020-21.
During the September 2021 quarter, VIL increased the entry-level prepaid pricing plan from Rs 49 to Rs 79, in a phased manner, as well as increased the tariffs in some postpaid plans.
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Its consolidated revenue during July-September 2021 declined about 13 per cent to Rs 9,406.4 crore, compared with Rs 10,791.2 crore in the year-ago period.
The impact of the government relief package was not visible in the books of VIL as it was announced towards the end of the quarter under review. VIL, however, appreciated the move as it provides immediate relief to the company reeling under the financial stress.
“We welcome the government’s landmark reform package that addresses several industry concerns and provides immediate relief to the financial stress in the sector.
“We also appreciate the government’s recognition of the telecom sector’s contribution in keeping the country connected during the pandemic,” VIL Managing Director and CEO Ravinder Takkar said in a statement.
He added that during the last quarter, the company witnessed a recovery in its operating momentum as the economy has started to gradually open up, aided by the ongoing rapid vaccination drive.
The company’s subscriber base declined to 25.3 crore during the reported quarter, from 27.18 crore a year ago.
The subscriber base declined on a quarter-on-quarter basis as well.
Despite the overall dip in the subscriber base, VIL said its 4G subscriber base grew 33 lakh to 11.62 crore on a quarter-on-quarter basis. The data consumption on the VIL network grew 27.1 per cent on a year-on-year basis.
“Data usage per 4G subscriber is now at 14.5 GB per month, compared with 11.8 GB per month a year ago,” the statement said.
The average revenue per user (ARPU) declined to Rs 109 during the reported quarter, from Rs 119 a year ago.
The ARPU on a quarter-on-quarter basis, however, improved due to an increase in tariff.
“This quarter, we had taken certain pricing initiatives to improve ARPU, in line with our stated strategy. We increased the entry-level prepaid pricing plan from Rs 49 to Rs 79, in a phased manner, as well as increased the tariffs in some postpaid plans,” the statement said.
The company increased capital expenditure on a quarter-on-quarter basis to Rs 1,300 crore from Rs 940 crore in the previous quarter, to add more 4G sites.
“We continue to invest in 4G to increase our coverage and capacity. During the quarter, we added around 10,800 4G FDD sites primarily through refarming of 2G/3G spectrum (shutdown around 9,600 3G sites) to expand our 4G coverage and capacity.
“Our overall broadband site count stood at 4,50,481, compared with 4,47,114 in the first quarter of FY22,” the statement said.
VIL’s total gross debt (excluding lease liabilities and including interest accrued but not due) as of September 30, 2021, stood at Rs 1,94,780 crore. It comprised deferred spectrum payment obligations of Rs 1,08,610 crore, AGR liability of Rs 63,400 crore that are due to the government, and a total debt of Rs 22,770 crore from banks and financial institutions.
The company’s finance cost increased by 8.7 per cent to Rs 5,111.4 crore during the reported quarter, from Rs 4,700.2 crore in the year-ago period.
The company’s cash and cash equivalents stood at Rs 250 crore, and net debt stood at Rs 1,94,530 crore.
VIL has opted for four years of deferment for both spectrum and AGR dues.
“We have the option to convert the interest arising from deferment of these instalments into equity, which can be exercised by January 12, 2022,” the statement said.
The company said structural and procedural reforms, including the reduction in bank guarantees, rationalisation of AGR definition and reduction of interest rate, among others, will be beneficial to all the operators in the long run and allow them to further invest in network expansion and upgrade.