ECONOMY

Vodafone Idea Q4 Results: Net Loss Widens By 1.5 Times Amid Falling Revenue

Vodafone Idea Ltd.’s loss widened in the quarter ended March amid declining revenue after the interconnection usage charge regime was abolished starting Jan. 1.

Net loss stood at Rs 7,022.8 crore, according to its exchange filing. That compares with the Rs 3,854-crore consensus loss estimate of analysts tracked by Bloomberg.

Revenue fell 11.8% quarter-on-quarter to Rs 9,607.6 crore. Analysts had pegged revenue at Rs 10,040.5 crore. While the telecom operator’s other income rose 2% to Rs 40.2 crore, it faced exceptional expenses amounting to Rs 974.3 crore.

The telecom regulator had decided to phase out IUC—paid by a carrier for connecting calls of its subscribers to a rival network—from Jan. 1, 2020, which was later deferred by a year. Companies like Vodafone Idea gained from the IUC as they earned a good share of their revenue from incoming calls from other networks.

Highlights (QoQ)

  • Operating profit rose 2.9% to Rs 4,408.7 crore.

  • Margin expanded to 45.9% from 39.3%.

  • Average revenue per user—the amount an operator earns per subscriber per month—fell to Rs 107 from Rs 121.

The company said it’s in active discussion with potential investors to raise funds. “We enter FY22 with a renewed focus on executing our strategy to keep our customers ahead, and our cost optimisation plan remains on track to deliver targeted savings,” Ravinder Takkar, managing director and chief executive officer of Vodafone Idea, was quoted as saying in an earnings statement.

Gross debt, excluding lease liabilities, as of March 31, stood at Rs 1,80,310 crore—comprising deferred spectrum payment obligations of Rs 96,270 crore and AGR liability of Rs 60,960 crore. That also includes debt from banks and financial institutions of Rs 23,080 crore.

Net debt grew 53.7% sequentially and 59.9% over last year to Rs 1,79,960 crore. Capex spend in the fourth quarter was Rs 1,540 crore compared with Rs 970 crore three months ago.

The company’s 4G subscriber base rose by 42 lakh over last quarter to 11.39 crore. Data volumes grew 8.2% quarter-on-quarter, driven by higher 4G additions.

Wireless subscriber base stood at 28.37 crore in March. It gained gross subscribers in February and March this year after a gap of 15 months, according to data from the telecom regulator.

Vodafone Idea’s loss in gross and active subscribers base moderated in the fourth quarter. The company lost 5.4 lakh gross subscribers and 9 lakh active subscribers in the fourth quarter—compared to 1.12 crore gross users and 46 lakh active users, respectively, in the third quarter.

The company had acquired 23.6 MHz of spectrum across 900 MHz and 1800 MHz bands in Tamil Nadu, Karnataka, U.P. East, U.P. West, and West Bengal circles in the recent spectrum auctions and has a total spectrum holding of 1,768.4 MHz.

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