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NEW DELHI: Vodafone Idea’s loss widened in the December quarter even as the struggling telecom operator reported higher revenue and average monthly customer phone bills. Loss widened to 7,230.9 crore in the three months ended 31 December from 7,132.3 crore in the preceding quarter, while revenue rose sequentially by 3% to 9,717 crore from 9,406 crore. In the year-ago period, the company had reported a loss of 4,532 crore on revenue of 10,894.

The average revenue per user, a key profitability metric for the telecom sector, increased by 5.2% to 115 in the December quarter from 109 in the preceding three months, reflecting the impact of tariff hikes in November.

“While the overall subscriber base has declined as a result of the tariff interventions, the 4G subscriber base remained resilient on the back of superior data and voice experience offered by Vi GIGAnet," Vodafone Idea managing director and chief executive officer Ravinder Takkar said on Friday.

Its subscriber base declined to 247.2 million in the December quarter from 253 million in the September quarter, while subscriber churn rose sequentially from 2.9% to 3.4%. However, the 4G subscriber base grew by 800,000 in the third quarter, taking the total to 117 million customers. “We remain focused on executing our strategy to improve our competitive position and win in the marketplace," Takkar added.

India’s third-largest telecom operator released the results after market hours. It had opted for upfront conversion of interests from the deferment of the spectrum and AGR dues into equity earlier this month.

The Aditya Birla Group-owned telecom service provider had a lower capex at 1,050 crore versus 1,300 crore in the three months ended September. While cash and cash equivalents soared to 1,500 crore in the December quarter versus 250 crore in the preceding three months, net debt increased to 1.97 trillion as of 31 December from 1.94 trillion in the year-ago period.

Its gross debt, including interest but excluding lease liabilities, increased to 1.99 trillion. The debt comprised deferred spectrum payment obligations of 1.1 trillion, adjusted gross revenue (AGR) liabilities of 64,620 crore, and borrowings of 23,060 crore from banks and other financial institutions.

The company’s earnings before interest, depreciation and amortization for the December quarter improved to 1,620 crore from 1,410 crore in the preceding quarter. This was aided by the improvement in revenue and higher savings on account of cost optimization. However, this was partially offset by higher marketing expenses.

Vodafone Idea said it would continue to invest in 4G to increase its coverage and capacity, after adding about 4,000 4G sites primarily through re-farming of 2G or 3G spectrum and upgrading its core and transmission network.

It has been shutting down 3G sites in a phased manner, which marginally lowered its overall broadband site count to 450,330 in Q3 versus 450,481 in Q2 of FY22.

In the last two quarters, the carrier increased tariffs on entry-level prepaid plans from 49 to 79 and increased tariffs on certain postpaid plans across retail and enterprise segments. It also moved the entry-level prepaid plan to 99, which helped improve ARPU.

Data usage per 4G subscriber was 14 GB per month during the quarter versus 12 GB in the year ago.

Vodafone Idea said it achieved merger opex synergies of 8,400 crore from its cost optimization exercise and achieved about 90% annualized savings on a run-rate basis by the end of the third quarter against the target of 4,000 crore. “With this, we have achieved the desired cost optimization in line with our operating model," the company said.

Earlier this month, Vodafone Idea opted to convert the full amount of interest, of about 16,000 crore, due to the deferment of spectrum instalments and AGR dues, into equity. “The conversion of this DoT debt into equity will reduce the overall debt of the company," it added.

The move followed Vodafone Idea’s decision to opt for a four-year moratorium on AGR dues and spectrum instalment dues between October 2021 and September 2025, after the government announced a reform package for the telecom sector, including measures to address the structural, procedural and liquidity issues. “This will provide us liquidity support and direct the cash flow generation towards capex investment," Vodafone Idea said in a statement.

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