iWorld
Vodafone Idea dials down losses as data use and upgrades pick up
MUMBAI: When the signal gets stronger, the numbers start to sound better. Vodafone Idea reported a narrower loss in the fiscal third quarter, buoyed by rising data consumption and a steady shift of users to higher-paying 4G and 5G plans.
The debt-laden telecom operator posted a consolidated loss after tax of Rs. 52.86 billion for the quarter ended December 31, compared with a loss of Rs. 66.09 billion a year earlier. Overall revenue rose year on year to Rs. 113.23 billion, edging past analysts’ expectations of Rs. 112.77 billion.
A key bright spot was average revenue per user, which increased 7.3 per cent to Rs. 186. The improvement followed a 2 per cent rise in 4G and 5G subscribers and a sharp 26.7 per cent jump in average data usage among these customers, reflecting higher engagement on faster networks.
Despite the uptick, Vodafone Idea continues to lag its larger rivals on pricing power. Reliance Jio reported an ARPU of Rs. 211.4, while Bharti Airtel remains well ahead at Rs. 256, underlining the competitive pressure in India’s telecom market.
The company has been investing steadily in its 4G and 5G infrastructure to improve service quality and arrest subscriber losses. Earlier this month, it also received regulatory relief when the government capped its long-pending adjusted gross revenue payments at $13.79 million annually over the next six years, easing near-term cash flow stress.
Vodafone Idea said its AGR dues stood frozen at Rs. 876.95 billion as of December 31, although the figure remains subject to reassessment. The operator, 49 per cent owned by the Indian government, was formed in 2018 through the merger of Vodafone Group’s Indian arm and Aditya Birla Group’s Idea Cellular.
India’s third-largest telecom provider has reported losses every quarter since the merger and has steadily ceded market share to Jio and Airtel, weighed down by more than $22 billion in debt and a network rollout that trails its bigger competitors. Even so, the latest quarter suggests that higher data usage and premium plan upgrades are beginning to offer Vodafone Idea some much-needed breathing room.
