5 Key Takeaways from Vodafone Idea Q4 Earnings Report

Vodafone Idea has released its Q4 earnings report highlighting the development it has done on the operational side as well reporting increased ARPU and earnings

  • Vodafone Idea closed India's largest rights issue in this quarter raising Rs 250 billion
  • The company also showed improvement in earnings as the EBITDA increased by 57% QoQ to Rs 17.9billion

Vodafone Idea Limited has been become the biggest telecom operator by subscriber base in the industry after the merger of the second place and third place telcos, Vodafone India and Idea Cellular and everyone has been eying the performance of the telco. However, with its focused move towards retaining paying customers, the telco has been rapidly losing subscribers. In February, the telco had lost 5.8 million subscribers. Now the telecom operator has released its Q4 earnings report highlighting the significant feats that it has accomplished in the last quarter if FY19 and giving us some insights into the current financials of the company. It is worth noting that the fourth quarter was also the time when Vodafone Idea completed India’s largest rights issue.

Stabilisation in Revenue and Increased ARPU

The telecom operator firstly noted that it was on the path of achieving stabilisation of revenue in the Q4 and it came majorly as a result of ‘service validity vouchers’. The earnings report highlighted that Revenues grew by +0.1% QoQ in Q4 (Q3: -2.2%, Q2: -7.1%). Q4 average daily revenue increased by 2.3% QoQ after 11 consecutive quarters of decline. Vodafone Idea also noted that its strategic initiatives to better the ARPU (Average Revenue Per User) also have started to come to fruition as the average daily revenue (ADR) for the quarter grew 2.3% QoQ after witnessing successive declines for the 11 prior quarters. Also, the revenue for the quarter was Rs 117.8 billion, up 0.1% QoQ, lower than the ADR growth due to fewer days in Q4FY19.

Rapid Synergy Realisation

Another highlight from the earnings report was on synergy, which noted that the synergy realisation was well on track with ~60% of the synergy target achieved to date. The telcos’ normalised Q4 operating expenses excluding licence fee & spectrum usage charges and roaming & access charges were ~Rs 12.8 billion (~Rs 51 billion annualised) lower than the telco’s proforma operating expenses in Q1, i.e. the last quarter before completion of the merger.

Earnings and Debt

The company also showed improvement in earnings as the EBITDA increased by 57% QoQ to Rs 17.9billion. EBITDA normalised for one-offs stands at Rs 15.9billion. The telecom operator also noted in its report that the network integration is moving at a fast pace and customers now benefit from a unified network experience in the ten service areas of West Bengal, Andhra Pradesh, Haryana, Madhya Pradesh, Himachal Pradesh, Assam, North East, J&K, Bihar and Punjab. As for the debt, the telco announced that the Gross debt as of March 31, 2019, was Rs 1,259.4 billion, including deferred spectrum payment obligations due to the Government of Rs 906.8 billion. Cash & cash equivalents were Rs 75.5 billion resulting in net debt of Rs 1,183.9 billion (vs Rs 1,149 billion in Q3FY19).

With the release of the Q4 earnings report, Balesh Sharma, CEO of Vodafone Idea also remarked, “We are pleased with the rapid progress we have made to deliver on our stated strategy. The initiatives we have taken since the merger are yielding positive results, and we are well on track to deliver our synergy targets two years early.

India’s Biggest Rights Issue

Lastly, Vodafone Idea also highlighted that it successfully closed India’s largest rights issue, raising Rs 250 billion of equity. The telco saw active participation from public shareholders (ex-promoters) which resulted in 1.2x subscription for the public component of the issue, demonstrating investors’ strong support for our strategy.

Operational Development

On the operational front, the telco added 8,915 4G TDD sites during the quarter to augment capacity and deployed massive MIMO on around 2,000 sites in select key locations. However, unique broadband locations and broadband sites declined this quarter as the process of redeployment is currently underway.

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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Nikhil Mumbai-PuneVetanChetan-Bengaluru Recent comment authors
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There is one only take away from the results… that Vodafone Idea managemenr are a bunch of idiots. Their forced strategic ‘service validity recharge’ has resulted only in an insulting increase of a laughable 0.1% QoQ.

Till management person/mindset from Vodafone is the CEO of Vodafone Idea Ltd, they will be wiped out sooner or later. Feel sad for Mr. KM Birla whom l like a lot.


JUST 8000 TDD SITES??? What about fiberisation of its tower in metro??? Vil has TDD spectrum almost across all circles barring tn and ka, then why just 8000tdd sites??? Clearly effect of cost cutting and losses evident… This company is not sustainable. Jfm qtr also vil lost 56mn subscriber. Now total count stands at 339 mn I think straight from 445mn at the time of merger. At this rate of customer loss vil will start loosing revenue also in big nos. forget about losses…

Nikhil Mumbai-Pune
Nikhil Mumbai-Pune

It’s just in this quarter. Not since start of operations. I hope you will read it properly next time. In Maharashtra and Gujarat as per rooted Redmi Note 4,Idea has deployed band 40 since 2017 itself. People on this forum which are from Bengal/UP/MP already said since many months they have band 41 deployment.

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