Vodafone Idea adds subscribers for first time since 2018, cuts losses in Q1
New Delhi: Vodafone Idea Ltd, India’s third-largest telecom operator, reported a strong June quarter, adding subscribers for the first time in a quarter since its
New Delhi: Vodafone Idea Ltd, India’s third-largest telecom operator, reported a strong June quarter, adding subscribers for the first time in a quarter since its August 2018 merger, even as it cut its losses while growing revenue and operating profit, helped by network expansion and rising data consumption. The telecom operator’s customer base rose to 193.1 million in the quarter ended June, from 192.8 million in the preceding quarter, marking its first quarterly net subscriber addition since the merger of Vodafone India and Idea Cellular. However, on a year-on-year (y-o-y) basis, the subscriber base fell by 4.6 million from 197.7 million. The Mumbai-headquartered company’s net loss narrowed to ₹3,754 crore from ₹6,608 crore a year earlier, significantly beating Bloomberg’s estimate of ₹5,391 crore. The result was helped by lower total expenses, including interest costs, as well as a one-time gain of ₹1,816 crore from the fair-value adjustment of equity shares to be settled with the promoter entity, Vodafone Plc. In the March quarter, the company had reported a net profit of ₹51,970 crore owing to a one-time accounting gain from the government's adjusted gross revenue (AGR) relief.
Also Read | Birla says Vodafone Idea past toughest phase, backs turnaround Revenue from operations in the first quarter of fiscal year 2027 (Q1FY27) rose 6% year-on-year (y-o-y) to ₹11,689 crore, also beating Bloomberg’s estimate of ₹11,499 crore, while quarterly Ebitda (earnings before interest, tax, depreciation and amortization) grew 9.1% y-o-y to ₹5,034 crore. “Our robust Q1FY27 performance is a strong validation of our defined strategy and disciplined execution,” Abhijit Kishore, chief executive officer of Vodafone Idea, said in a company statement, adding that the company has already placed orders worth ₹9,000 crore related to network expansion. The telecom operator declared its results after market hours. On Monday, shares of Vodafone Idea ended 0.7% higher at ₹12.82 on the Stock Exchange, compared to a 0.05% gain in the benchmark Nifty 50. Vodafone Idea’s earnings follow a massive AGR relief in April. The government slashed the cash-strapped telecom firm’s AGR dues by ₹23,600 crore to ₹64,046 crore after recalculation, deferring the bulk of its payments by 10 years, to be paid from FY36 to FY41. Meanwhile, the company has been looking to raise bank debt of ₹35,000 crore.
The timeline of the debt fundraise is crucial, as besides a ₹45,000-crore network expansion plan, Vodafone Idea has to pay ₹49,000 crore towards spectrum dues over the next three years, which would take its cumulative outgo to nearly ₹1 trillion. Also Read | Telcos start offering mobile services on Mumbai Metro after months-long dispute In May, the telecom operator put out an ambitious financial roadmap to generate and secure over ₹1.08 trillion in cash over the next three years. “The ongoing conversation with the lenders gives us the confidence of successful closure of debt discussions. With all critical business parameters now moving in the right direction, our focus remains on execution and AI-led transformation across the organization,” Kishore said. Simultaneously, Vodafone Idea is also having discussions with state-owned BSNL over potential sharing of telecom infrastructure to reduce operating costs, after an intervention by a parliamentary committee. The government owns a 49% stake in Vodafone Idea. For cost synergies, it has informed the parliamentary panel that “there are active discussions to further enhance the tenancy of Vodafone Idea Limited on BSNL tower infrastructure for 4G and 5G”.
The BriefWire