Jio emerges biggest telco after Vodafone Idea unveils Q1 numbers

Voda Idea's June quarter net loss at Rs 4,873 crore

After losing 14.1 million subscribers from April to June (Q1), Vodafone Idea lost the tag of the country’s biggest telco by subscribers to Reliance Jio. Vodafone Idea, while declaring its Q1 numbers on Friday, said it had 320 million subscribers at the end of the June quarter as against 334.1 million in the March quarter.

Last week, Reliance had reported Jio had 331.3 million users at the end of the June quarter. Mukesh Ambani-led Jio had pipped Bharti Airtel in May to become the second largest mobile operator with 322.9 million users and 27.80 per cent market share, according to Trai data. Airtel had 320.38 users or 27.6 per cent market share.

“Our subscriber base declined primarily due to customer churn following the introduction of ‘service validity vouchers’ in the prior quarters,” Vodafone Idea said in a statement.

For the June quarter, the Kumar Mangalam Birla-led telco posted a loss of Rs 4,873 crore and a sequential decline of 4.3 per cent in revenue to Rs 11,270 crore. Comparable numbers for the same quarter of the previous year is not available. Average revenue per user (ARPU) down-trading also affected the telco.

The numbers missed Street estimates, which had expected a loss of Rs 3,247 crore and revenue at Rs 11,800 crore. The Q1 ARPU increased 3.8 per cent to Rs 108, much below Street estimates. Jio reported ARPU of Rs 122 in Q1.

 “We remain focused on expanding our 4G coverage to over a billion Indians as well as expanding our data capacities,” said Balesh Sharma, chief executive, Vodafone Idea. He said the company is on track to achieve synergy target post merger with Idea by Q1 of FY21, with 66 per cent network integration already achieved.

The telco’s Ebitda (earnings before interest, tax, depreciation and amortisation) for Q1 increased to Rs 3,650 crore versus Rs 1,790 crore in Q4 of FY19 (Rs 1,590 crore adjusted for one-offs), as the adoption of IndAs 116 positively benefited Ebitda by Rs 2,410 crore. As lease rentals are no longer included as a part of network expenses and other expenses, these were lower by Rs 2,330 crore and Rs 80 crore respectively, for the quarter.

 

The impact of lower revenues was partially offset by further cost synergy realisation, with Q1 operating expenses (excluding licence fees, spectrum usage charges and roaming and access charges) lower by Rs 1,480 crore to Rs 7,620 crore compared to Q1 of FY19, after adjusting for inflation driven cost increases and incremental network rollout. Capex spend for Q1 was Rs 2,840 crore. Gross debt was Rs 1.2 trillion, including deferred spectrum payment obligations of Rs 89,180 crore due to the government, excluding lease liabilities.