Debt-laden telecom operator Vodafone Idea reported a wider-than-expected loss for the second quarter on Thursday, hit by a continued decline in subscribers and higher expenses. The consolidated loss after tax widened to Rs. 7,596 crore for the three months ended September 30, from Rs. 7,132, a year ago. Analysts, on average, expected the company to incur a loss of Rs. 6,925 crore.
Vodafone Idea said its subscriber base declined to 234.4 million from 240.4 million in the first quarter, while total expenses rose 10 percent to Rs. 18,302 crore.
However, its average revenue per user (ARPU), a key performance indicator for telecom firms, saw a rise of 19.5 percent to Rs. 131 helped by tariff hikes. In the previous quarter, ARPU stood at Rs. 128.
Vodafone Idea, a merger between the Indian unit of Vodafone and Aditya Birla’s Idea Cellular, was formed in 2018 to withstand Reliance Jio’s price war that disrupted the domestic telecom industry.
Vodafone Idea, however, has been posting losses since then, with subscribers switching to the bigger rivals. Burdened with massive government debt and spectrum dues, it has been unable to strike a fund-raising deal.
The company was in continued talks with lenders and investors for fund raising for network expansion and 5G rollout, Chief Executive, Akshaya Moondra, said in a statement.
The company’s net debt stood at Rs. 22,200 crore as of September end.
Revenue from operations rose 12.8 percent to Rs. 10,615 crore.
In January, Vodafone Idea’s board approved conversion of the interest on dues into equity after the government announced a relief package for the sector. Post the conversion, the government will have a 35.8 percent stake in the company.
© Thomson Reuters 2022