Vodafone Idea narrowed its net loss to Rs 4,532 crore in the third quarter of FY2021 on the back of gains from the sale of its stake in Indus Towers. In the same quarter last year, the company had posted a net loss of Rs 6,438 crore. Gross revenue declined 1.7 per cent on a year on year basis to Rs 10,894 crore in the reported quarter as the company continues to lose subscribers.
During the third quarter, Vodafone Idea undertook limited tariff hike in a few of its family pack plans in select circles like Uttar Pradesh but that did not translate into revenue growth. Sequentially, the company’s revenue grew by 0.9 per cent. Earnings before interest tax depreciation and amortization (EBIDTA), however, increased 25.3 per cent on a year on year basis to Rs 4286 crore due to cost optimisation. The result was boosted by an exceptional income of Rs 2118 crore from the sale of the company’s 11.5 per cent stake in the mobile towers company Indus Towers. Operationally it was a weak quarter for Vodafone Idea compared to its peers. The company’s subscriber base dwindled by two million sequentially while rival Airtel gained 14.2 million subscribers in the quarter ended December. Vodafone Idea’s net subscribers stood at 269.8 million at the end of the quarter. However, 4G subscribers saw an addition of 3.6 million to 109.7 million. Data volumes too grew 3.4 per cent quarter on quarter driven by higher 4G additions. The average revenue per user grew sequentially by 1.6 per cent to Rs 121 but growth was slower compared to Airtel and Reliance Jio which clocked 2.4 per cent and 4 per cent growth respectively. In a statement, the company’s managing director and CEO Ravinder Takkar said, “In Q3FY21, we improved subscriber retention and operating performance, supported by Vi GIGAnet, which remains the fastest 4G network in India, as per Ookla as well the network with highest rated voice quality as per TRAI – a testimony to our superior network. We remain focused on executing our strategy, and our cost optimisation plan remains on track to deliver the targeted savings. The board has approved funds raising to support our strategic intent and we are in active discussions with potential investors.” The company has targeted cost savings of Rs 4000 crore by December 2021 and has achieved 50 per cent of targeted operational expenses efficiency on the run rate basis, the statement said. In September, Vodafone Idea’s board had approved fundraising of up to Rs 25,000 crore consisting of a mix of debt and equity. The company is in discussion with a consortium led by Oaktree Capital Management which has offered $ 2 billion to the company. Fundraising will help the company to meet its debt and adjusted gross revenue obligations. At the end of December quarter, the company’s gross debt excluding lease liabilities stood at Rs 1.17 trillion which included deferred spectrum payment obligations of Rs 94,200 crore and bank loans of Rs 23170 crore. Vodafone Idea has adjusted gross revenue liability of Rs 58,254 crore and has so far paid Rs 7850 crore towards AGR dues. Last month, telecom companies including Vodafone Idea and Bharti Airtel approached the Supreme Court seeking a correction in the computation of AGR demands made by the government. The court is yet to hear the matter.