Photo: Mint
Photo: Mint

Vodafone Idea net loss narrows to 6,439 crore in Dec quarter

  • Telecom firm’s consolidated revenue from operations rose from 10,844 crore in Q2 to 11,089 crore in Q3
  • The telecom firm’s Q3 net loss exceeded expectations of analysts, who had pegged it at 4,716 cr

NEW DELHI : Vodafone Idea Ltd narrowed its net loss to 6,438.8 crore in the three months to December from the 50,922 crore loss posted in the September quarter, having accounted for most of the liabilities related to adjusted gross revenue (AGR) in the preceding quarter itself.

However, the loss was higher than analysts’ expectations of 4,716 crore, according to Refinitiv estimates.

The company recorded exceptional expenses of 52.8 crore for AGR-related dues in the December quarter. It had made provisions of 44,150 crore for these dues in the September quarter.

Vodafone Idea’s consolidated revenue from operations rose marginally from 10,844 crore in the September quarter to 11,089 crore in the December quarter, driven by the addition of 8.3 million 4G users in the quarter. However, the revenue in the corresponding quarter last year was higher at 11,764.8 crore.

“The earnings show that Vodafone Idea is still under pressure. The loss is higher than expected and the revenue increase is much lower compared to rivals. The only silver lining is that customer churn has reduced compared to the previous three quarters," said a Mumbai-based analyst requesting anonymity.

The company’s average revenue per user (ARPU) inched up to 109 in December-end from 107 at the end of September. However, rival operators beat Vodafone Idea on this metric with Airtel posting an ARPU of 135, and Jio 128.4 in the December quarter.

In December, all telecom companies raised their tariffs by as much as 40%.

“The tariff increase had limited impact on this quarter’s revenue," Vodafone Idea said on Thursday. “After several quarters of pressure on topline, we witnessed consistent revenue turnaround from September onwards—before the recent price hikes," Vodafone Idea chief executive officer Ravinder Takkar said. “The tariff increase effective December should help improve revenue performance. We are on track to deliver our opex synergy targets by April-June," he said.

Vodafone Idea’s results come three weeks after the Supreme Court agreed to hear its petition to modify its 24 October order that made the company liable to pay more than 50,000 crore of AGR-related dues by 23 January.

Airtel and Tata Teleservices have also filed modification pleas to seek more time to pay AGR-related dues. The telcos want to negotiate a sustainable payment schedule with the department of telecommunications (DoT), which has issued demand notices of more than 1 trillion for revenue share, interest and penalty. The court is likely to hear the modification pleas on Friday.

Vodafone Idea’s ability to continue as a going concern is dependent on the positive outcome of the modification application filed in the apex court and the subsequent agreement with DoT for payment in instalments after some moratorium and other reliefs, the company said on Thursday.

The Supreme Court on 24 October ended a 14-year court battle when it upheld the government’s broader definition of revenue, on which it calculates levies on telecom operators, dealing a body blow to the telecom industry, which is already burdened with falling tariffs and mounting debt.

On 5 February, UK-based Vodafone Group Plc said that the outlook for Vodafone Idea, its telecom joint venture with the Aditya Birla group in India, remains critical and the company is seeking relief from the Indian government.

To raise funds, Vodafone Idea plans to monetize its 11.15% stake in Indus on completion of the Indus-Infratel merger.

“We are also exploring options to monetise 160,000 kilometres of intra-city and inter-city fibre as well as our data centres," the company said on Thursday.

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