New Delhi, May 14 : India’s largest telecom operator Vodafone Idea Monday said its consolidated loss has narrowed sequentially to Rs 4,881.9 crore in March 2019 quarter, as strategic initiatives to improve revenue and average realisation from subscribers helped financials.
The loss has narrowed from Rs 5,004.6 crore during the third quarter of 2018-19, aided by 3.4 percent drop in total expenses.
The books of Vodafone Idea recorded a comprehensive loss of Rs 962.2 crore in the corresponding quarter a year ago, but the year-on-year figure is not comparable as the merger between India unit of Vodafone Group and Idea Cellular was completed on August 31, 2018.
For Vodafone Idea — whose financials has been battered by intense competition posed by the richest Indian Mukesh Ambani’s Reliance Jio — the revenue from operations for March quarter of 2018-19 came in at Rs 11,775 crore, almost flat compared to Rs 11,764.8 crore logged in the previous December quarter. A Vodafone Idea statement highlighted that the company has seen a “sequential stabilisation of revenues in Q4” benefitting from the introduction of ‘service validity vouchers’ that require customers to make a minimum recharge of Rs 35. “As expected, this resulted in a decline of 53.2 million subscribers as ‘Incoming-only’ or ‘Low ARPU’ customers migrated their spending from multiple SIMs to single SIM, taking the overall subscriber base to 334.1 million,” the statement said.
Vodafone Idea said that its revenues grew by 0.1 percent quarter-on-quarter in Q4, and noted that the Average Revenue per User (ARPU) for the said period grew by 16.3 percent to Rs 104, from Rs 89 in the October-December 2018 period.
“The initiatives we have taken since the merger are yielding positive results and we are well on track to deliver our synergy targets two years early,” Vodafone Idea CEO Balesh Sharma said.
He added that the company remains focused on fortifying its position in key profitable districts by expanding coverage and capacity of its 4G network, targeting higher share of new 4G customers, and improving cash flows through cost transformation.
For the full FY2019, the company’s loss stood at Rs 14,603.9 crore, while the revenue from operations was pegged at Rs 37,092.5 crore.
The company attributed the reduction to disconnection of ‘incoming only’ or ‘low ARPU’ customers.
During the three months ended March 2019, the company added 5.4 million 4G customers, taking its overall 4G base to 80.7 million. The broadband subscriber base for the quarter was 110.2 million. The total data volumes grew by 9 percent sequentially to 2,947 billion MB, while total minutes on the network declined by 1.3 percent during the quarter.
Gross debt stood at Rs 1,25,940 crore, including deferred spectrum payment obligations owed to the government of Rs 90,680 crore.
The Vodafone Idea scrip closed at Rs 14.45 a piece on the BSE, 3.21 percent higher than the previous close. The results were announced after market hours.
Despite improvement in operational metrics, the earnings scorecard of Vodafone Idea – and of Bharti Airtel last week – underline the challenge telecom players face to grow profitability in India.
The Indian telecom sector, in spite of massive data and voice consumption, has been battered by falling tariffs, eroding profitability, and towering debt, in the face of stiff competition triggered by disruptive offerings of Reliance Jio.
Telecom operator Bharti Airtel recently reported a surprise 29 percent surge in March quarter net profit to Rs 107.2 crore, aided only by exceptional income gains. The revenue for the Sunil Mittal company soared 6.2 percent to Rs 20,602.2 crore during the same period.
Rival Reliance Jio, however, posted 64.7 percent jump in net profit to Rs 840 crore in the March quarter of 2018-19 (Rs 510 crore in year ago period). Its operating revenue was up 55.8 percent to Rs 11,106 crore during the reported quarter.
