Vodafone Idea Q2 Loss Widens to Rs. 7,596 Crore As ARPU Rises
Debt-laden telecom operator Vodafone Idea reported a wider-than-expected second-quarter loss on Thursday, hit by a continued decline in subscribers and higher costs. Consolidated loss after tax widened to Rs. 7,596 crore in the three months ended September 30, from Rs. 7,132, last year. Analysts, on average, had expected the company to post a loss of Rs. 6,925 million.
Vodafone Idea said its subscriber base fell to 234.4 million from 240.4 million in the first quarter, while total expenses rose 10% to Rs. 18,302 million.
However, average revenue per user (ARPU), a key performance indicator for telecom companies, saw a 19.5 percent rise to Rs. 131 helped by tax increases. Last quarter, ARPU stood at Rs. 128.
The ARPU of major rivals Reliance Jio and Bharti Airtel was at Rs. 177.2 and Rs. 190 per quarter, respectively.
Vodafone Idea, a merger between Vodafone’s Indian unit and Aditya Birla’s Idea Cellular, was formed in 2018 to counter Reliance Jio’s price war that disrupted the domestic telecom industry.
Vodafone Idea, however, has been posting losses ever since, with subscribers switching to bigger rivals. Burdened with government debt and arrears, it has been unable to negotiate a fund-raising deal.
The company was still in discussions with lenders and investors to raise funds for network expansion and 5G rollout, said Chief Executive, Akshaya Moondra, in a statement.
The company’s debt stands at Rs. 22,200 crore in late September.
Income from operations rose 12.8 percent to Rs. 10,615 million.
In January, Vodafone Idea’s board approved the conversion of interest to equity after the government announced a bailout package for the sector. After the conversion, the government will own 35.8 percent of the company.
© Thomson Reuters 2022
