Vodafone Idea (Vi) narrowed its net loss by 71 per cent to Rs 7,319 crore in first quarter FY 2022 on a year on year basis on account of lower exceptional expenses. In the same period last year it had posted a net loss of Rs 25,460 crore due to provisioning for adjusted gross revenue dues liability.
On a sequential basis, however, it was a weak showing and the loss widened from Rs 7,022 crore due to lower revenue.
While the telecom company had managed to trim subscriber losses in the third and fourth quarter FY 2021, it lost 12.4 million subscribers in the June end quarter. The company’s customer base shrunk to 255.4 million subscribers with the company blaming the erosion to the second wave of Covid-19 pandemic. Rival Reliance Jio added 14.4 million subscribers in the first quarter grabbing market share from Vi.
This was the first financial result of the company under its new chairman Himanshu Kapania who took charge following the resignation of Kumar Managlam Birla last month. The company has sought a moratorium from the government for its spectrum dues and the worsening financial condition has resulted in credit rating downgrade for its long term loans and non convertible debentures.
Gross revenue declined 14.1 per cent on a year on year basis to Rs 9152 crore due to fall in subscribers.
Sequentially too revenue declined 4.7 per cent from Rs 9607 crore. While operating expenses declined on a year on year basis they were higher by 4.7 per cent to Rs 5444 crore.
Earning before interest tax depreciation and amortisation declined 9.5 per cent on a year on year basis to Rs 3707 crore in first quarter FY 2022.
Average revenue per user (ARPU) fell sequentially to Rs 104 from Rs 107 on account of free recharges during the second wave of pandemic and lower usage.
In a statement the company’s managing director and CEO Ravinder Takkar blamed the weak result to significant disruptions caused by the second wave of the pandemic. “ We continue to focus on executing our strategy to keep our customers ahead and our cost optimization plan remains on track to deliver the targeted savings. We are in active discussions with potential investors for fund raising to achieve our strategic intent,” he said. The company has targeted Rs 4000 crore of annualized cost savings and has achieved around 70 per cent of its target on a run rate basis by end of first quarter, it said.
Similarly, Vi said it continues to invest in increasing coverage and capacity. During the quarter it added around 6400 4G FDD sites primarily through refarming of 2G/3G spectrum to expand its 4G coverage.
While the company reported a drop in overall and 4G subscriber base, average data consumption per user increased sequentially from 13.06 GB to 14.9 GB.
Vi’s total gross debt as of June end stood at Rs 1.91 trillion comprising of deferred spectrum obligations, adjusted gross revenue liability and bank loans.