Vodafone Idea posts Rs 6,439-cr Dec-quarter loss; subscriber base falls 21%

Posts sixth straight quarterly loss in Q3

Vodafone Idea reported a consolidated loss of Rs 6,439 crore for the December quarter as compared with a Rs 5,005-crore loss in the same period in 2018-19.
 
This is higher than analyst estimates, which had pegged the loss at Rs 4,000 crore, after being in the red by a record Rs 50,922 crore in the September quarter. Exceptional items in the quarter were valued at Rs 633 crore, largely on account of integration and merger-related costs.
 
While a large part of the liabilities on account of aggregate gross revenues (AGRs) was in the September quarter (just over Rs 30,000 crore), the company made a Rs 53-crore balance provision for those in the December quarter. The company posted revenues of Rs 11,089 crore, down 6 per cent over the year-ago quarter, and this was in line with analyst estimates.
 
Though the churn, which was at 5 per cent a year ago, has come down to 3.3 per cent in this quarter, its subscriber base saw a decline of 21 per cent YoY to 304 million. Bharti Airtel’s subscriber base was flat at 283 million while Jio reported a 32 per cent increase in subscribers to 370 million.
 
On a sequential basis, the company posted a growth rate of 2.3 per cent. While the price hike has not so far been reflected in the performance, the gains on a sequential basis were led by 4G additions and improvement in average revenue per user (ARPU).
 
While 4G addition growth was 9.4 per cent, ARPU growth was 1.8 per cent.  On a YoY basis, ARPUs were up 22 per cent.
 
Led by revenue growth and synergy gains from the merger, operating profit on sequential gains was up 0.7 per cent to Rs 3,421 crore.
 
Higher interconnect costs, however, limited the gains. The company indicated it had achieved 85 per cent of its targeted operating expense synergy of Rs 8,400 crore and is on track to achieve the synergy gains by the first quarter of FY21.
 
Net debt went up a bit to Rs 1.033 trillion, against Rs 1.019 trillion in the September quarter.
 
On the AGR issue, the company’s managing director and chief executive officer, Ravinder Takkar, said the company was engaged with the government, seeking relief on AGRs as well as other matters. The company has filed for modifying the supplementary order with the Supreme Court after its earlier petition was dismissed.
 
On the operational front, Takkar indicated after several quarters of pressure on the top line, Vodafone Idea witnessed a revenue turnaround from September. The tariff increase in December is expected to reflect in revenue performance in the coming quarters.