You are here: Home » Companies » Results
Business Standard

Vodafone Idea trims loss in subscriber base, lags in ARPU growth

4G subscribers saw an addition of 3.6 million to 109.7 million

Topics
Vodafone Idea | telecom sector | 4G

Aneesh Phadnis  |  Mumbai 

vodafone, idea
Operationally it was a weak quarter for Vodafone Idea compared to its peers | Representational image

(Vi) narrowed its net loss to Rs 4,532 crore in the December quarter (Q3), thanks to gains from the sale of its Indus Towers stake. In Q3FY20, the operator had posted a net loss of Rs 6,438 crore.

Not only did the firm see an erosion in its subscriber base, it also lagged peers in parameters like average revenue per user (ARPU).

Vi had lost 8 million subscribers in Q2, and was able to arrest the fall in subscribers in Q3. At the end of third quarter, Vi’s subscriber base stood at 269.8 million, a sequential decline of 2 million.

In contrast, Airtel gained 14.2 million subscribers in Q3, while Reliance Jio added 5.2 million customers.

Vi, however, saw a rise in its customer base as it scaled up its investments to increase its network and coverage. During the quarter, it added 12,000 FDD sites, primarily through the refarming of 2G/3G spectrum, to expand its capacity.

There was an addition of 3.6 million 4G subscribers to 109.7 million in Q3, with data volumes growing 3.4 per cent sequentially, driven by higher 4G additions.

ALSO READ: Singapore-based DBS Bank plans to trim India branches in 2-3 years

Yet, Vi continues trailing its peers in ARPU, despite the increase in data volume. ARPU grew 1.6 per cent sequentially to Rs 121 but growth was slower compared to Airtel and Jio, who clocked 2.4 per cent and 4 per cent ARPU growth, respectively.

In a statement, MD and CEO Ravinder Takkar said: “In Q3FY21, we improved subscriber retention and operating performance, supported by Vi GIGAnet, which remains the fastest 4G network in India according to Ookla, as well the network with highest rated voice quality according to TRAI. We remain focused on executing our strategy, and our cost optimisation plan remains on track to deliver the targeted savings.

The board has approved of a fundraising to support our strategic intent and we are in discussions with potential investors.”

Vi has targeted cost saving of Rs 4,000 crore by December 2021, and has achieved 50 per cent of the targeted operational expense efficiency on the run rate basis, it said.

ALSO READ: Tonbo bags multi-million-dollar deal for indigenising Indian missiles

Gross revenue declined 1.7 per cent year-on-year (YoY) to Rs 10,894 crore in Q3, as the company continued losing subscribers. It undertook limited tariff hike in few of its family pack plans in select circles such as Uttar Pradesh, but that did not translate into revenue growth.

Sequentially, revenue grew 0.9 per cent; earnings before interest, tax, depreciation, and amortisation rose 25.3 per cent YoY to Rs 4,286 crore thanks to cost optimisation.

The result was boosted by the exceptional income of Rs 1,696 crore, which included gains from the sale of its 11.5 per cent stake in Indus Towers.

In September, the board had approved of raising up to Rs 25,000 crore — a mix of debt and equity. It is in discussions with a consortium led by Oaktree Capital Management, which has offered $2 billion.

Fundraising will help the telco meet its debt and adjusted gross revenue (AGR) obligations. At the end of December, gross debt (excluding lease liabilities) stood at Rs 1.17 trillion, which included deferred spectrum payment obligations of Rs 94,200 crore and bank loans of Rs 23,170 crore.

Vi has an AGR liability of Rs 58,254 crore and has, so far, paid Rs 7,850 crore towards. Telecom operators had, last month, approached the Supreme Court seeking correction in the computation of AGR demands. The court is yet to hear the matter.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, February 13 2021. 18:20 IST
RECOMMENDED FOR YOU
.