Quarterly revenue for the cash-strapped telco dipped marginally by 0.83% on-year, to Rs 10531.9 crore in the Jan-March quarter, the company said in its earnings release Thursday.
VIL’s revenue was in line with analyst estimates for revenue (Rs 10532.1 crore) while the net loss came in better than the average analyst estimates of Rs 7505.5 crore compiled by ET.
VIL’s average revenue per user (ARPU<\/a>), an important performance matrix for telcos, was flat sequentially at Rs 135, in the absence of any tariff hikes. ARPU though was up 9.3% on year, backed by hikes late last year.
The telco managed to contain churn as it lost 2.7 million subscribers—versus 5.8 million in FYQ3—in the quarter ended March 31, 2023 to end the period with 225.9 million. The cash-strapped carrier continued to cede ground to rivals Reliance Jio<\/a> and Bharti Airtel<\/a>, both of whom added users. Vodafone Idea though added 1.1 million 4G users to end the quarter with 122.6 million. Per capita data usage grew 0.7% at 15.1 GB.
Vi shares closed 0.43% higher on the Bombay Stock Exchange Thursday at Rs 6.96. The results were announced after market hours.
“We are pleased to report annual revenue growth for the first time post –merger on the back of consistently improving performance for (the) last several quarters. We continue to see growth in ARPU and 4G subscribers,” Akshaya Moondra, chief executive, Vodafone Idea said in the earnings statement.
Vi’s revenue for FY23 was Rs 42180 crore, up 9.5% on year while net loss widened by 3.7% to Rs 28245.4 crore.
“We continue to remain engaged with our lenders for further debt fund raising as well as with other parties for equity or equity linked fund raising, to make required investments for network expansion, including 5G rollout,” Moondra added.
Vodafone Idea, India’s only loss-making private telco, is the only carrier yet to give a timeline for the launch of 5G services, which, analysts believe, will lead to further market share losses.
VIL’s efforts to raise Rs 20,000 crore via a mix of debt and equity have been unsuccessful for over a year now. It did see a glimmer of hope in the form of the government converting VIL’s accrued interest on deferred AGR<\/a> and spectrum payment dues into equity amounting to 33.44%.
The conversion of accrued interest to equity has helped the telco reduce its interest and finance cost for the quarter by around Rs 1000 crore, analysts estimate.
The telco’s net debt reduced to 2.09 lakh crore as compared to Rs 2.22 lakh crore in the preceding quarter helped by the conversion of debt representing NPV of interest arising due to deferment of spectrum instalments and AGR dues into equity issued to the government, VIL said.
“The reduction in debt was expected after the interest conversion to equity by the government. The annual revenue jump is mainly because of the spike seen in the first two quarters of the fiscal because of the tariff hikes taken in November 2021. Once that effect peters out, it will be tough for the telco to maintain revenue momentum, as is seen Q3 and Q4,” said an analyst with a leading brokerage who asked not to be named.
In the absence of another round of tariff hikes, raising debt and equity and renegotiating and refinancing existing loans and terms , the telco’s prospects of recovery continue to diminish, analysts said. The existing debt as payable by March 21, 2024, stood at Rs8380.4 crore. The telco hasn’t defaulted on any of its financial obligations so far, and is negotiating and seeking support of vendors such as tower company Indus Towers to whom it owes around Rs7000 crore.
Vi’s deferred spectrum payment obligations stand at Rs 1.3 lakh crore and adjusted gross revenue (AGR) liability stands at Rs 65, 550 crore. Debt from banks and financial institutions stood at Rs 11, 390 crore.
Cash and cash equivalents rose to Rs 230 crore end-December from Rs 160 crore at December end. The company’s networth stood at negative Rs 73838.8 crore as at the end of the March quarter.
Capex spend continued to decline at Rs 560 crore in Q4 as compared to Rs 750 crore in Q3FY23.
Vi’s earnings before interest, taxation, depreciation and amortisation (EBITDA) improved to Rs 4210.3 crore, as compared to Rs 4180.8 crore in the fiscal third quarter.
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