Analyst Believes Vodafone Idea Just Hanging in There

Vodafone Idea (VI), the third largest wireless operator in India is “just hanging in there,” ICICI Securities said in a report on Sunday. The operator on Thursday reported its second quarter financial results for the period ended September 30, 2020 with Vodafone Idea registering Rs 107.9 billion in revenue, up 1.2% quarter-on-quarter (QoQ). Vodafone Idea also highlighted that its average revenue per user (ARPU) for its second quarter in the current financial year improved to Rs 119 as compared to Rs 114 in the previous quarter.

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Vodafone Idea Lags in 4G Network, Impacted by Subscriber Base Decline

ICICI Securities in its report highlighted that the second quarter performance of Vodafone Idea “was a repeat of its continued weakness in terms of subscriber churn, lag in 4G network and balance sheet stress.”

Despite the operator registering an 1.2% growth in its revenues, ICICI Securities said that Vodafone Idea was “impacted” by decline in its subscriber base. The operator’s user base is said to have declined around eight million to 271.8 million with the churn rate increasing to 2.6% during the quarter.

“Even the post-paid sub base at 21.2 mn was down by 0.3 mn QoQ, clearly reflecting the weak competitive positioning,” ICICI Securities said in its report. “We note that ARPU growth of 4.4% QoQ, was largely owing to [the] benign base of Q1, wherein recharge unavailability and extension had led to decline.”

ICICI Securities says Vodafone Idea “Weakest” Telecom Operator

In early September, Vodafone Idea board approved a fundraising plan of up to Rs 25,000 crore through a mix of debt and equity to meet its capital needs.