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Business News/ Companies / Company Results/  Vodafone Idea losses widen; telecom firm in talks with banks for debt funding

Vodafone Idea losses widen; telecom firm in talks with banks for debt funding

Vi is in discussions with banks to raise up to ₹25,000 crore and additional non-fund based facilities of up to ₹10,000 crore. Capex for the next three years is expected to be in the range of ₹50,000 crore to ₹55,000 crore

Vodafone Idea customer care center with new logo at Ghaziabad, Uttar Pradesh/IndiaPremium
Vodafone Idea customer care center with new logo at Ghaziabad, Uttar Pradesh/India

New Delhi: Vodafone Idea’s losses widened to 7,666 crore for the quarter ended March 2024, from 6,424 crore the year before, while revenues improved marginally to 10,639 crore, on the back of improving subscriber mix, 4G subscriber additions and change in entry level plan. Average revenue per user (Arpu), a key metric of profitability, improved to 146, up 7.6% on-year primarily aided by change in entry level plan and subscriber upgrades.

The No. 3 carrier by subscribers which raised 18,000 crore last month through India’s largest FPO, said that it was in talks with lenders to secure debt funding of 35,000 crore which will be used for expanding its networks.

“We are in discussions with consortium of banks to raise upto 25,000 crore and additional non-fund based facilities of up to 10,000 crore," the carrier said. Post the telecom reforms package in September 2021, its bank exposure has reduced by 34,600 crore.

It added that capex for the next three years is expected to be in the range of 50,000 crore to  55,000 crore, which will be channelled towards expanding 4G population coverage in 17 priority circles, 5G launch in key cities/ geographies and capacity expansion to address the increasing data demand.

“Our equity fund raise of ~ 215 billion ( 21,500 crore) will enable us to kickstart the investment cycle to expand our 4G coverage as well as launch of 5G services to effectively participate in the industry growth opportunities. We are engaged with our lenders for tying up debt funding towards the execution of our overall network expansion plan," Akshaya Moondra, CEO, Vodafone Idea, said on Thursday. 

The carrier added that on 8 May, its shareholders approved equity infusion of 2,075 crore  on preferential basis, from an Aditya Birla Group (ABG) entity, at an issue price of 14.87 per share. “This coupled with the preferential equity raise of 494 crore in 2022 from Vodafone Group and ABG takes the total fund infusion by both the promoter groups to 7,000 crore between March 2022 and May 2024," it added.

Post the FPO, preferential allotment to promoters and conversion by American Tower Corp., the promoter shareholding stands at 38.2% and government shareholding at 23.8%.

“We are pleased to report annual revenue and Ebitda (preIndAS) growth for the second consecutive year on the back of consistently improving performance for last several quarters despite significantly lower investments; a clear reflection of our execution capabilities. We registered growth in ARPU and 4G subscribers for 11 successive quarters," he added.

The company added that the company was in talks with lenders, vendors and the department of telecom, to which it owes majority of its debt, for entering into payment plans for paying overdues or for getting waivers.

Earnings before interest, tax, depreciation and amortisation (Ebitda) for the quarter grew by 3% on-year to 4,340 crore and Ebitda margin for the quarter was 40.9%. For the full year, losses widened to 31,236 crore from 29,307 crore the year before, while revenues rose to 42,321 crore, up from 41,917 crore the year before. Ebitda for the year increased to 8,400 crore, registering a growth of 1.3%.

Capex spend for the quarter stood at 550 crore and for the year at 1,850 crore, the lowest amongst peers.

Vodafone Idea has shut down 3G completely in six circles including Kerala, Maharashtra, Gujarat, Andhra Pradesh, Mumbai and Kolkata where 3G spectrum is completely refarmed to 4G.

It completed minimum rollout obligations for 5G in four circles of Maharashtra, Delhi, Tamil Nadu, and Punjab. It added that its 4G subscriber base continued to grow for the eleventh successive quarter, reaching 126.3 million as of March 2024, from 122.6 million in March 2023. The overall subscriber base stood at 212.6 million.

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Gulveen Aulakh
Gulveen covers both corporate and economy, and policy sections of Mint. She also covers telecom, IT from the corporate side and disinvestment, finance ministry from the economy side. Gulveen finds the rare mix of sectors she covers to be incredibly interesting.
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Published: 16 May 2024, 08:01 PM IST
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