Voda Idea posts Rs 5K cr loss in Q2, to raise Rs 25K cr

Country’s largest telecom player Vodafone Idea has reported a net loss for the July-September quarter on Wednesday at Rs 4,974 crore.

This is the first quarterly result for the merged entity after Vodafone India and Idea Cellular merger got approval on August 30 this year.

The company also announced plans to raise capital of about Rs 25,000 crore, including infusion by Vodafone Group of Rs 11,000 crore and Aditya Birla Group of up to Rs 7,250 crore.

The second-quarter net loss included a one-time charge of Rs 566 crore, mainly due to integration and merger related costs.

The revenue from operations stood at Rs 7,664 crore. The results include numbers for Idea Cellular up to August 30 and Vodafone Idea from August 31 to September 30, which is why they are not comparable to earlier periods, the company said in a statement.

The Board of Directors of Vodafone Idea has set up a committee to evaluate a potential capital raise through options including, but not limited to, a rights issue, qualified institutional placement and a preferential share issue. If approved, the capital would be raised by the fourth quarter of this fiscal.

“Headline tariffs remained stable during the quarter. However, customer migration to lower Arpu (average revenue per user) offerings led to a 4.7% quarter-on-quarter decline in Arpu to Rs 88 for the quarter,” the statement said.  

The company lost 13 million customers during the quarter. 

Vodafone Idea has a subscriber base of 422 million and has replaced Bharti Airtel as the largest telecom player after the merger.

During the quarter, the data volumes expanded to 2,260 petabytes as the usage per data customer increased to 5.6 gb per month (versus 5.0 gb in Q1FY19) and the overall broadband customer base increased to 99.7 million, a net addition of 4.4 million. The broadband subscriber penetration now stands at 23.6%. Voice volume remained flat due to low seasonal demand during the quarter, the company said.

The merger of Vodafone India and Idea Cellular was a result of consolidation triggered by hyper competition with the entry of new player Reliance Jio in the telecom sector. Bharti Airtel net profit for second-quarter had declined by over 65 % to Rs 119 crore.

Vodafone Idea said it remains optimistic about the long-term outlook for the market and the future for the business, and further equity funding is required in order to ensure sufficient balance-sheet flexibility to successfully execute its strategy.

Several parties have indicated a potential interest in acquiring company’s fibre network, consisting of over 156,000 Km of intra- and inter-city fibre routes. 

FALLING REVENUES

• Customer migration to lower Arpu offerings led to a 4.7% quarter-on-quarter (QoQ) decline in Arpu to Rs 88 for the quarter
   
• Vodafone Idea, which has a subscriber base of 422 million, lost 13 million customers during the quarter