Operating income stood at an 11-quarter high, backed by growth in its 4G user base for the 10th straight three-month period, with average revenue per user (ARPU) – a key operational metric – rising 2.1% sequentially to Rs145. Arpu was mainly helped by “change in entry level plan and subscriber upgrades”, Vi said in its earnings statement Monday.
Loss for the October-December quarter narrowed from Rs8747 crore in the previous quarter ended September 31, due to a one-time gain of Rs 755.5 crore as the telecom disputes tribunal in December 2023 ruled in favour of cash-strapped Vi for adjusting excess payments made by the telco to the Department of Telecommunications (DoT) towards statutory dues.
Quarterly revenue for the joint venture between UK’s Vodafone Group Plc and India’s Aditya Birla Group fell 0.4% sequentially to Rs10,673.1 crore, amid continuing customer losses, underlining its continuing inability to compete with bigger rivals, Reliance Jio and Bharti Airtel.
Blended churn rose to 4.3%, reflecting heavy user losses, with the loss-making telco ending the December quarter with a user base of 215.2 million, having lost 4.6 million subscribers on quarter. The telco’s total 4G base though rose marginally to 125.6 million in the December quarter.
“We are pleased to report highest EBITDA of Rs. 21.4 billion (Rs 2140 crore) in last 11 quarters,” Vi chief executive Akshaya Moondra said in the statement. “We are able to grow our 4G subscribers and ARPUs consecutively for last 10 quarters. We remain engaged with various parties for fundraising, to make required investments for network expansion, including 5G rollout,” he added.
Vi reiterated that its ability to continue as a going concern hinged on the raising additional funds, successful negotiations with lenders and vendors and generation of cash flow from operations in order to settle its liabilities as they fall due.
The telco’s cash and cash equivalents rose to Rs 318.9 crore as of December-end. Its net worth stood at a negative Rs 97,932 crore as of end-December.
Vi has been struggling for more than three years to raise funds needed to pay vendors and the government, expand its 4G coverage and invest in its pending 5G rollout to compete effectively with its bigger rivals.
“We are in discussion with various technology partners for finalisation of our 5G rollout strategy as well as working with many partners to develop 5G use cases relevant to the Indian market and build device ecosystems. We are also in advance stage of 5G trials of embracing new technologies such as vRAN & ORAN,” the telco said.
By contrast, Jio has completed its nationwide 5G rollout and acquired 90 million 5G users as of end-December. Airtel too is poised to launch 5G services nationally by March. Loss-making Vi has been unable to unveil 5G launch plans, largely hindered by its pending fundraise.
“Vi’s massive customer losses in the fiscal third quarter coupled with a sequential fall in monthly data usage in a quarter when the cricket World Cup happened indicates the telco’s much delayed and pending 5G services rollout is hurting the company. This suggests that both 5G operators, Jio and Airtel are gaining revenue and customers at Vi’s expense,” Rohan Dhamija, head (India & Middle East) at Analysys Mason, told ET.
Vi’s net debt widened to Rs 2.14 lakh-crore in the fiscal third quarter. These include deferred spectrum payment obligations of Rs 1.38 lakh-crore, adjusted gross revenue (AGR) related dues of Rs 69,000 crore and optionally convertible debentures amounting to Rs 1660 crore. Debt from banks and financial institutions (FIs) reduced to Rs 6050 crore in the fiscal third quarter from Rs 7860 crore in the July-September period.
Existing debt payable by December 2024, is Rs 5385.4 crore, excluding amounts classified as current on account of not meeting certain covenant clauses.
The company’s stock closed 0.62% higher on Monday valued at Rs14.70 per share on BSE. Results were declared after the market hours.
Even though the telco added 4G users, the average data usage per user declined in the December quarter to 15.7 GB per month from 16.1 GB previously. The fall in Vi’s overall user base has also resulted in a decline in minutes of use to 401 billion minutes from 406 billion in the September quarter.
Capex spends saw a sequential fall at Rs 330 crore versus Rs 520 crore in the December quarter.
“We have shut down 3G completely across 5 circles of Maharashtra, Gujarat, Andhra Pradesh, Mumbai and Kolkata by refarming the spectrum in these circles,” Vi said.
