Voda Idea Q3 net loss widens to Rs 7234.1 crore; ARPU rises to Rs 115

Vodafone Idea’s (Vi) net loss for the fiscal third quarter widened to Rs 7,234.1 crore from Rs 7,144.6 crore in the previous one as operating and interest expenses rose. But the telco’s average revenue per user (ARPU) rose sequentially, partly helped by steep prepaid tariff hikes taken last November, which, though, led to more customer losses.

Quarterly revenue for the cash-strapped operator increased over 3% sequentially to Rs 9,717.3 crore in the October-December quarter, while ARPU rose to Rs115 from Rs109 in the previous quarter.

The second consecutive quarter of revenue growth was driven by “several tariff interventions taken in last few months. 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,” Ravinder Takkar, Vi’s managing director, said in a statement Friday.

India’s sole loss-making private carrier – dragged by high finance and depreciation costs - reiterated that its future depended on multiple factors including successful fundraising and support of its lenders. Its auditor, in a report, said that the company’s financial performance has hurt its ability to generate sufficient cash flows that it needs to settle or refinance its liabilities as they fall due.

"The company's ability to continue as a going concern is dependent on its ability to raise additional funds as required and successful negotiations with lenders for continued support and generation of cash flow from its operations that it needs to settle its liabilities as they fall due," said the telco.

The telecom JV between UK’s Vodafone Plc and India’s Aditya Birla Group, reported a 6.5% sequential rise in operating expenses to around Rs 5,901 crore in the fiscal third quarter.

Vi’s net debt has risen to around Rs 1.97 lakh-crore while cash & cash equivalents increased to Rs 1,500 crore end-December from Rs 250 crore at September end. Quarterly capex was lower at Rs 1,050 crore compared to Rs 1,300 crore in the July-September period.

Last month, Vi had said on an investors' call that it is targeting a four-fold jump in annual capital expenditure to $2 billion (about Rs 15,000 crore) as it looks to take on stronger rivals, Reliance Jio and Bharti Airtel.

Vi shares closed 1.24% lower at Rs 11.90 on BSE Friday. The results were announced well after market hours. The company’s net worth stood at a negative Rs 59,919.6 crore in the quarter ended December.

Vi’s top management has said that equity funding — including from promoters UK’s Vodafone Plc and the Aditya Birla Group (ABG) — is likely to be tied up by March. The company has been hoping that the government’s relief package – which allowed it to defer statutory dues by four years and recent price hikes, will make the telco more attractive for investors.

“…the full impact of the recent hikes (taken last November) will reflect in the March quarter results,” said an analyst at a leading global brokerage who did not wish to be named.

The telco’s churn – or the percentage of users leaving its network – rose to 3.4% from 2.9 %, losing a net 5.8 million users compared to 2.4 million in the July-September period. But its 4G subscriber base rose by 0.8 million, with the overall 4G base now at 117 million,” the carrier said. Data usage per user, however, fell 5.4% sequentially to 14 GB in the October-December period. The telco ended the quarter with 247.2 million users.

Quarterly operating margins narrowed to 39.3% from 41.1 % in the previous quarter, largely triggered by the rise in marketing expenses after the government announced the telecom relief package.