Vodafone loss widens in Jan-Mar, firm reiterates survival depends on SC order2 min read . Updated: 01 Jul 2020, 02:13 AM IST
- A tariff hike in December took revenues 6% higher from December quarter’s ₹11,089 crore to ₹11,754 crore
- December tariff hike drove ARPU for Q4 up by ₹12 to ₹121 in January-March. EBITDA margin improved 650 bps to 37.3%
MUMBAI: Higher finance costs and exceptional items on account of licence fees and spectrum dues in the AGR case nearly doubled the losses at Vodafone Idea in March quarter to ₹11,643 crore from ₹6,438 crore in the immediate previous three-month period.
Declaring its March quarter operational and financial performance on Wednesday, the company again stressed that its continued existence would depend on what the Supreme Court decides in the AGR matter when it meets in the third week of this month.
The department of telecommunications (DoT) wants the company to pay ₹58,254 crore as AGR dues. The company claims that amount to be ₹45,960 crore. The company wants a 20-year timeframe to pay its dues that it claims now stand at ₹39,106 crore after it paid ₹6,854 crore during the March quarter.
The company, along with Bharti Airtel, Tata Teleservices and others, had in October 2019 lost a 14-year-old case in the Supreme Court against the DoT. The matter pertained to classification of what comprised AGR. As per DoT, telecom companies had under reported their revenues and thus paid lower levies.
It contended that rental incomes and revenue from sale of handsets that these companies bundled with their services formed part of adjusted gross revenues (AGR). It argued that all these revenue streams rose out of the telecom licences it had given them and hence needed to be taxed. Thee apex court accepted this argument and ordered them to pay as per DoT's classification.
Finance costs at the beleaguered company rose 17% from December quarter to ₹4,010 crore.
Exceptional items, pegged at ₹6,140 crore, deepened the company’s loss. Provisions to the tune of ₹1,783 crore on account of licence fees and spectrum user charges in the AGR case and ₹3,887 crore due to one-time spectrum charges in a separate matter figured among the exceptional items.
A tariff hike in December took revenues 6% higher from December quarter’s ₹11,089 crore to ₹11,754 crore. Average revenue per user (ARPU) for Q4 improved to ₹121, a ₹12 appreciation from ₹109 in Q3FY20, driven by the prepaid tariff hike effective from December 2019.
Vodafone Idea share closed at ₹10.62 on Tuesday, down 4.5% from Monday’s close on BSE.
Margins at the level of earnings before interest, taxes, depreciation and amortization (EBITDA) improved by 650 basis points to 37.3%.
Vodafone Idea was expected to report around 3-4% gains in average revenue per user (ARPU) during Jan-March to bring it up to ₹113.
According to a consensus of brokers, Vodafone Idea was expected to report a consolidated revenue of ₹11692.30 crore and net loss ₹4610.30 crore. The company thus disappointed the investors on both revenue and profit fronts, albeit far more on the latter.
The company's subscriber base got reduced by 13 million during the quarter to 291 million, with 105.6 million 4G subscribers.