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Informist, Tuesday, Feb. 11, 2025

By Arya S. Biju

MUMBAI – Vodafone Idea Ltd.'s net loss for the December quarter narrowed both quarter-on-quarter and year-on-year because of a decline in finance and marketing costs. The loss was lower than expected, but the revenue missed the Street's estimate. This was the 26th consecutive quarter that the telecom company reported a loss.

The company's consolidated net loss narrowed to INR 66.09 billion in the December quarter from INR 71.76 billion in the September quarter and INR 69.86 billion in the year-ago quarter. Analysts had expected the debt-laden company's consolidated net loss to increase to INR 72.21 billion.

The company's consolidated sales for the quarter grew 1.7% sequentially to INR 111.2 billion, lower than analysts' estimate of INR 112.5 billion. On a year-on-year basis, the consolidated revenue grew 4.2%. The company's customer revenue for the quarter was INR 111 billion, up 1.7% sequentially. This was aided by the recent tariff hikes, Vodafone Idea said in a press release.  

For the nine months ended December, the company's consolidated net loss was INR 202.2 billion, down from a loss of INR 235.6 billion a year ago. The company's consolidated revenue for the period rose 1.6% on year to INR 325.6 billion.

The company's finance cost for the December quarter declined around 10% sequentially and 8.9% on-year to INR 59.40 billion. Marketing expense fell marginally on quarter and 7.8% on-year to INR 11.20 billion. The company's employee benefit expense fell 6.2% on quarter to INR 5.49 billion, but was up marginally on year.

The sequential rise in depreciation cost was offset by decline in finance costs in the December quarter. As such, Vodafone Idea's total expenses declined 2.3% sequentially for the quarter to INR 179.7 billion.

The company's top line for the quarter was supported by a tariff-hike led increase in average revenue per user and an increase in other operating income. The company's other operating income surged 20% on quarter to INR 168 million. On a year-on-year basis, the difference is even more significant, as it had reported other operating income of INR 5 million in the December quarter last year. The company's other income for the quarter was down nearly 17% sequentially, but it shot up year-on-year to INR 2.50 billion from INR 249 million.

The company's blended average revenue per user for the December quarter was INR 163, higher than INR 156 in the previous quarter. It's customer average revenue per user excluding machine-to-machine services for the quarter was INR 173, up from INR 166 in the September quarter. This was driven by tariff hike and customer upgrades, Vodafone Idea said. The company's blended churn rate remained flat sequentially at 4.5%. 

The company's consolidated earnings before interest, tax, depreciation and amortisation for the December quarter rose 3.6% sequentially to INR 47.12 billion, almost in line with analysts' estimate of INR 47.2 billion. The company's EBITDA margin for the quarter was 42.4%, up from 41.6% in the previous quarter.  

The telecom company lost over 5 million subscribers in the December quarter, taking its total customer base to 199.8 million. This was higher than the estimated loss of 4 million subscribers. The company also saw a marginal decline in data subscribers during the quarter to 134.2 million. However, the company's postpaid users grew nearly 3% to 25.2 million in the quarter and its fourth generation telecom service users grew marginally on quarter to 126 million.

Vodafone Idea increased its 4G coverage by 19 million in the quarter, reaching a population of 1.07 billion by Dec. 31. In the nine months ended December, the company expanded its 4G coverage to around 41 million. The company said it is on track to achieve its 4G coverage target of 1.1 billion by March and plans to further increase it to 1.2 billion population. It plans to launch its fifth generation telecom services in Mumbai by March and in Delhi, Bengaluru, Chandigarh and Patna by April, Vodafone Idea said in the press release.

The company incurred a capital expenditure of INR 32.1 billion in the December quarter, taking its capital expenditure for Apr-Dec to INR 53.3 billion. The company said the network rollout will accelerate further in the Jan-Mar, with an expected full year capital expenditure of around INR 100 billion.

The company's debt from banks reduced by INR 52.9 billion during the last one year. As on Dec. 31, the company's debt from banks was INR 23.3 billion, down from INR 76.2 billion a year ago. The company's cash and bank balance was INR 120.9 billion as of Dec. 31. 

Vodafone Idea also confirmed that the Department of Telecommunications has dispensed the requirement of bank guarantee to be submitted for spectrum auctions held prior to the Telecom Reform 2021 with certain conditions. As per the communications from the department, no bank guarantees are required to be provided for the auctions until 2021, except a one-time bank guarantee for partial shortfall for the 2015 auction for one year. Prior to this reform, bank guarantees totalling INR 247.5 billion were required to be provided, Vodafone Idea said. 

Vodafone Idea announced its Oct-Dec earnings after market hours on Tuesday. Shares of the company ended at INR 8.82 on the National Stock Exchange, down 3.2% from the previous close.  End

Edited by Ashish Shirke

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