Vodafone Idea posted a net loss of Rs 7,132 crore in the second quarter FY 2022 as the telecom company continued to struggle with high finance costs and subscriber loss. In the same period last year, the company had reported a net loss of Rs 7,218 crore.
This was the first quarterly result of the company after the government’s reform package that has come as a lifeline for the financially stressed company. While the company did not announce any fundraising, it indicated it is in continued dialogue with lenders for easier loan terms.
The company’s gross revenue declined 12.8 per cent on a year on year basis to Rs 9406 crore due to fall in subscribers.
Sequentially, however, revenue rose 2.8 per cent from Rs 9,152 crore. While operating expenses declined year-on-year, they were higher by 1.8 per cent to Rs 5,543 crore sequentially.
Earning before interest tax depreciation and amortisation declined 6.3 per cent YoY to Rs 3,862 crore in second quarter FY 2022. Finance costs rose 9 per cent to Rs 5,082 crore.
Vi’s average revenue per user (ARPU) grew sequentially to Rs 109 from Rs 104 on account of price hike in entry level prepaid plans and certain postpaid plans.
The company lost 2.4 million subscribers in the second quarter and its customer base stood at 253 million. The company however managed to trim its subscriber loss compared to the first quarter which had seen a decline of 12.4 million customers.
Vi also reported sequential addition of 3.3 million 4G subscribers to 116.2 million. While sequential growth in data consumption remained flat, it grew 27 per cent on a year on year basis. Data usage per 4G subscriber stood at 14.5 Gb/month as against 11.8 Gb/month a year ago, the company said.
Ravinder Takkar, managing director & chief executive officer, Vodafone Idea Limited, said “During the last quarter, we witnessed a recovery in our operating momentum as the economy has started to gradually open up aided by the ongoing rapid vaccination drive. We continue to improve our 4G subscriber base on the back of superior data and voice experience on Vi GIGAnet. We continue to focus on executing our strategy to improve our competitive position and win in the marketplace.”
On September 15, the union cabinet approved a relief package for the telecom sector that included a four-year moratorium on AGR and spectrum payments. It also included reduced bank guarantees and the option of converting interest accruing on dues into equity. While Vi has decided to avail of moratorium on both AGR and spectrum payments it has to take a call on option of converting dues into equity within ninety days.
As of September end Vi’s total debt stood at Rs 1.97 trillion. In the first half of FY 22 the company reported a loss of Rs 14,451 crore and its net worth was negative Rs 52,685 crore.
“As a result of an earlier rating downgrade certain lenders had asked for increase of interest rates and additional margin money/security against existing facilities. The group has exchanged correspondence and continues to be in discussion with lenders for next steps/waivers,” the company said in its results filing.