Vodafone Idea has just released its quarterly earnings report for Q3 FY22. The telco has reported a significant rise in average revenue per user (ARPU) to Rs 115 during the quarter compared to Rs 109 in Q2 FY22. The rise in ARPU can be attributed to the prepaid tariff hikes. Though the tariff hikes got implemented close to the last month of the quarter, the rise in ARPU is a positive sign for the telco.
Vodafone Idea also invested in networks and increased the 4G coverage of its networks from 1012 million Indians in Q2 FY22 to 1015 million population in Q3 FY22.
Vodafone Idea Reports a Loss of Rs 7,230 Crore During the Quarter
The telco’s subscriber churn rate worsened to 3.4% in the December quarter as compared to 2.9% in the previous quarter. This is because the capex levels of the telco aren’t similar to what its competitors, including Reliance Jio and Bharti Airtel, are doing.
The 4G subscribers of the telco grew to 117 million in the December 2021 quarter from the 116.2 million figure in September 2021 quarter.
During the December quarter, Vodafone Idea’s loss widened to Rs 7230 crore. In the previous quarter, the telco had reported a loss of Rs 7,132 crore. The revenue for operations fell to Rs 9717 crore in Q3 FY22 compared to Rs 10,894 crore in Q2 FY22.
The rise in ARPU should continue for the telco as the complete effect of the tariff hikes will be seen in Q4 FY22. But at the same time, Vodafone Idea’s subscriber churn rate might rise further due to the increase in tariffs. If the telco can’t increase capex to where its competitors are, it will be hard to add new subscribers any time soon. Vodafone Idea is in desperate need of funding so that it can invest in its networks and be able to compete with Airtel and Jio.
