In Short:
Vodafone Idea reported a widened net loss for the fiscal fourth quarter, but also raised funds through equity and is in discussions with banks for more funding. The telco saw improvement operationally, with increased ARPU and 4G subscribers. Despite revenue decline, Vi is focusing on expanding 4G coverage and launching 5G services to compete with bigger rivals like Jio and Airtel.
Vodafone Idea Reports Widened Net Loss in Fourth Quarter
Mumbai: Vodafone Idea has reported a net loss of Rs 7,675 crore for the fourth quarter of the fiscal year FY24, compared to Rs 6,986 crore in the previous three-month period. The telecom company cited high debt and customer losses as the key reasons for the widened loss.
Financial Discussions and Operational Improvements
The company recently raised over Rs 20,000 crore through equity and is now in discussions with a consortium of banks to raise up to Rs 25,000 crore along with additional non-fund based facilities of up to Rs 10,000 crore.
Operationally, Vodafone Idea reported its highest ever quarterly earnings before interest, tax, depreciation, and amortization (EBITDA) post the 2018 merger, amounting to Rs 2,180 crore. The telco’s average revenue per user (ARPU) also saw a 0. 7% sequential increase to Rs 146. This positive financial performance comes as a welcome development for the struggling telecom operator, which has faced intense competition in the Indian market. However, challenges still lie ahead for Vodafone Idea, as it grapples with high debt and ongoing tariff wars. Additionally, the company will need to adapt to changes in technology and consumer behavior, as highlighted in the latest Cisco revenue forecast.
Chief Executive Akshaya Moondra expressed satisfaction with the company’s performance and highlighted the growth in ARPU and 4G subscribers over the last several quarters.
Quarterly Results and Market Performance
In the March quarter, Vodafone Idea reported a marginal decline in revenue, closing the quarter at Rs 10,610 crore. The company’s subscriber base decreased from 215 million in the previous quarter to 213 million in the March quarter.
For the full fiscal year ending March 2024, Vodafone Idea recorded a loss of Rs 30,409.8 crore on a revenue of Rs 42,651.7 crore.
The company’s shares closed 0.3% lower at Rs 13.15 on the BSE following the quarterly results announcement after market hours.
Operational Metrics and Future Investments
The total 4G base of Vodafone Idea increased in the March quarter, with average data usage also showing a slight rise. The company’s capex spends saw a sequential increase, primarily aimed at expanding its 4G coverage and preparing for 5G launch and capacity expansion.
Vi is targeting a funding of Rs 45,000 crore, which will be key to its future expansion plans and competitive positioning in the telecom sector.
Debt and Financial Position
Vodafone Idea highlighted its net debt situation, including deferred spectrum payment obligations and AGR-related dues. The company has reduced its debt from banks and financial institutions in the fiscal fourth quarter.
Despite a decline in net finance costs and a cash balance of Rs 170 crore as of March 31, 2024, Vodafone Idea emphasized the critical need for fundraising to support its operations and growth initiatives.
Recent Fundraising Initiatives
Last month, Vi concluded a public issue of shares, raising Rs 18,000 crore. A significant portion of this amount is allocated for 4G expansion and 5G rollouts to enhance subscriber base and improve ARPU.
With a focus on strengthening its 4G operations and advancing towards 5G technology, Vi aims to compete with major players like Jio and Airtel in the telecom market.
Overall, the telecom sector is witnessing strategic advancements, with Jio and Airtel making significant progress in the 5G space.
