Vodafone Idea, the country’s third largest telecom operator,  saw its net loss for the January-March quarter narrowing to Rs 6,419 crore from Rs 7,990 crore in the preceding quarter, owing to fall in network expenses, finance cost, depreciation, among others.

Bloomberg had estimated the company’s net loss narrowing to Rs 7,516 crore. Vodafone Idea’s revenue from operations missed estimates and fell 1% q-o-q to Rs 10,506.5 crore. Bloomberg had pegged revenues at Rs 10,590 crore. 

Annual revenue in FY23 rose 9.5% y-o-y to Rs 42,180 crore, an increase for the first time since the merger of Vodafone India and Idea Cellular, the company said.

In the March quarter, the company lost 2.7 million mobile subscribers, taking its subscriber base to 225.9 million at the end of March. Vodafone Idea’s blended churn of subscribers reduced to 3.8% during the quarter compared to 4.4% in October-December. 

Consolidated Ebitda was in line with estimates at Rs 4,210.3 crore, and rose nearly 1% sequentially due to a fall in network expenses and spectrum usage charges. Ebitda margin expanded 60 basis points to 40% from 39.4% in the preceding quarter.

Owing to a weak financial performance during the quarter, high debt levels, muted cash flow position, auditors continue to flag uncertainty. “The company’s ability to continue as a going concern is dependent on its ability to raise additional funds as required and successful negotiations with lenders and vendors for continued support and generation of cash flow from its operations that it needs to settle its liabilities as they fall due. Our conclusion is not modified in respect of this matter,” auditor SR Batliboi and Associates said.

At the end of the March quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) fell to `2.09 trillion. The gross debt comprises deferred spectrum payment obligations of `1.31 trillion, AGR liabilities of `65,550 crore that are due to the government, and debt from banks and financial institutions of `11,390 crore. Gross debt fell owing to conversion of interest dues of`16,133 crore by the government into equity and payment of bank debt.

Due to earlier rating downgrades, certain lenders had increased interest rates and sought additional margin money/security against existing facilities, the company said. By March 2024, the company has an obligation to pay debt of `8,380.4 crore. The company said its net working capital (excluding short term borrowing, future leased liabilities, and certain accruals towards pending litigations) stands at negative `20,006.3 crore.

“We are pleased to report annual revenue growth for the first time post-merger on the back of consistently improving performance for last several quarters. We continue to see growth in ARPU and 4G subscribers,” CEO Akshaya Moondra said in a statement.

“We continue to remain engaged with our lenders for further debt fund raising as well as with other parties for equity or equity linked fund raising, to make required investments for network expansion, including 5G rollout,” he added.

On the operational front, Vodafone Idea’s average revenue per user (Arpu) was flat sequentially at `135. The reason for a flat Arpu can be attributed to absence of tariff hikes. In the March quarter,  the company’s 4G subscriber base increased to 122.6 million from 121.6 million in the preceding quarter.

During the quarter, Vodafone Idea continued to lag behind peers Bharti Airtel and Reliance Jio on average data usage per customer. The company’s average data usage per customer was at 15.45 GB, whereas that of Jio was at 23.1 GB, and Airtel was at 20.3 GB. Growth in Vodafone Idea’s data usage per customer was marginal, compared to a fall in the average data usage for Bharti Airtel during the quarter. 

Similar to peers, Vodafone Idea too witnessed an increase in the minutes of voice usage per customer per month on the network. The company’s minute of usage on the network rose 1.6% sequentially to 623 minutes. 

Vodafone Idea is the only operator which has not declared its plans for 5G rollout yet. “We are in discussion with various network vendors for finalisation of our 5G rollout strategy,” the company said.

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