Vi’s loss in Q1FY25 narrows to Rs. 6,432 crores; The sub churning continues

Vodafone Idea’s net loss in the first quarter of the fiscal narrowed to Rs. 7675 crore down to Rs. 6434.4 crore, driven by lower finance and depreciation and amortization costs, even as it was dragged down by heavy customer losses and high debt.

Operationally, the joint venture between UK’s Vodafone and India’s Aditya Birla Group continued to face operational challenges. The telco’s average revenue per user (ARPU) – a key performance metric – was sequentially Rs. 146, though the full impact of the recent headline rate hike will be seen only from the second quarter of the fiscal. But there was a marginal increase in the 4G user base which led to a gradual increase in data usage.

“After the recent equity raise, we are in the process of expanding our 4G coverage and capacity as well as launching 5G services,” Vina Chief Executive Akshay Moondra said in an official statement on Monday. “Several capex has already been ordered and implemented, based on which we expect to grow our data capacity by around 15% and increase 4G population coverage by around 16 million by the end of September’24.”

Vi’s quarterly revenue fell 0.93% sequentially to Rs. 10,508 crore, impacted by continued customer losses, underscoring its continued inability to compete with larger rivals Reliance Jio and Bharti Airtel, both of which have rolled out 5G services nationally.

Vi posted a loss at the end of the June quarter with 210.1 million subscribers compared to 212.6 million in the January-March period. But, its 4G subscriber base increased from 126.3 million at the end of March to 126.7 million at the end of June. Subscriber churn – or users leaving its network – increased from 3.9% to 4%.

“Vi’s revenue decline on-quarter is due to continued loss of subscribers but the telco appears to have managed its finance costs well, reflected in a sharp sequential decline in interest and net finance costs as well as lower depreciation and amortization costs. helped it reduce its net loss in the fiscal first quarter,” Rohan Dhamija, head (India and Middle East) at Analysis Mason told ET.

In the June quarter, Vi’s interest and financing costs fell by 15.8% sequentially to Rs. 5262 crores. Its trade disbursements also fell by 4.9% respectively to Rs. 13,060.8 crore, reflecting recent part-payments of old dues of Indus Towers, analysts said.

Vi’s net finance cost in the June quarter fell 14.1% sequentially to Rs. 5370 crores.

Shares of the telco fell 0.62% on BSE on Monday to Rs. Closed at 16.01. Quarterly results were released after market hours.

More 4G users meant that the average data usage rose sequentially to 15.96 GB per month from 15.81 GB per month in the June quarter. But, it has come down from 627 minutes to 607 minutes in the March quarter.

Through equity route around Rs. After raising Rs 24,000 crore, the cash-strapped telco raised Rs. 25,000 crore to raise and Rs. It is also in discussions with a consortium of banks to raise additional non-fund-based facilities of up to Rs 10,000 crore, the company said earlier. .

The telco said the latest fund raising will enable it “to conclude negotiations with its lenders, vendors and DoT for continued support; and generate cash flow from operations that will enable it to settle its outstanding obligations.”

As of June 30, 2024, the telco’s cash and bank balance increased significantly to Rs. 18,150 crore has been done.

“Our current capital expenditure requirements are being met from equity funds. We are engaged with our lenders to tie up debt funding for execution of our network expansion with a planned investment of Rs. 500 to 550 billion over the next 3 years,” Moondra said in his statement.

During the quarter ended June, Vi’s capex expenditure in the March quarter was Rs. 550 crore against a gradual increase of Rs. 760 crores. However, this is significantly lower than Airtel which in Q1FY25 had Rs. 6782 crore was spent. Meanwhile for Jio, brokerage firm IIFL Securities pegged its network opex in the first quarter of the fiscal at Rs. 7923 crore has been estimated.

Vi had earlier said that the funds raised through debt and equity will be used to expand its 4G operations and roll out a greenfield 5G network over the next three years at around Rs. 55,000 crore for a capital expenditure of Rs.

The loss-making telco’s net debt stands at Rs. 1.39 lakh crore deferred spectrum payment liability, Rs. 70,320 crore in Adjusted Gross Revenue (AGR) related dues and Rs. 1610 crore including optionally convertible debentures.

Debt from banks and financial institutions (FIs) though in the fiscal fourth quarter stood at Rs. 4040 crore in the first quarter of the fiscal to Rs. 4650 crore was done.

Existing debt due by June 2025 is Rs. 2690 crore, excluding amounts classified as current due to non-fulfilment of certain contractual clauses.