Vodafone Idea (Vi) posted a net loss of Rs 7,176 crore for Q2 of FY25, compared to a net loss of Rs 6,432 crore in the previous quarter. The telecom company continued to face pressure from customer losses, although the recent tariff revision in July contributed to some sequential revenue growth. Customer ARPU (ex M2M), a key performance indicator, improved to Rs 166 in the quarter compared to Rs 154, reflecting a 7.8 percent increase on a sequential basis, driven by tariff hike, Vi said on Wednesday.
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Net Loss, Revenue Growth
The telco's revenue from operations grew slightly by 2 percent year-on-year (YoY), reaching Rs 10,932 crore, and saw a 4 percent increase quarter-over-quarter. Its EBITDA for the quarter rose to Rs 4,550 crore, up from Rs 4,283 crore in the same quarter last year.
Vi's total subscriber base stood at 205 million, with 4G subscribers at 125.9 million, a slight decrease from 126.7 million in Q1FY25. The overall subscriber base, including 4G, was impacted by recent tariff hikes. However, in the postpaid segment, the company reported growth in its customer base both on a QoQ and YoY basis.
"While a larger part of this increase is from M2M segment, we have seen consistent increase in retail postpaid customers over last one year, as we are providing optimum range of feature-rich offerings to meet the diverse needs of postpaid customers," Vi said.
Government Payment Obligations
The telco said its debt from banks and financial institutions reduced by Rs 4,580 crore during the last year (down from Rs 7,830 crore in Q2FY24) and stood at Rs 3,250 crore. The cash and bank balance was Rs 13,620 crore as of September 30, 2024.
As of September 30, 2024, the government's payment obligations stood at Rs 2,12,260 crore, including deferred spectrum payment obligations of Rs 1,41,940 crore and AGR liability of Rs 70,320 crore.
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Akshaya Moondra, CEO of Vodafone Idea Limited, said, "Post the successful capital raise, we kicked off our 4G expansion drive on an accelerated trajectory. We expanded 4G data capacity by 14 percent and 4G population coverage by 22 million, and consequently, our 4G speeds improved by 18 percent."
During the quarter, Vodafone idea finalised long-term capex contracts worth USD 3.6 billion with three global partners, Nokia, Ericsson, and Samsung, for the supply of network equipment over the next three years.
Need for Further Tariff Revisions
"On the debt raise, we remain engaged with our lenders for tying up debt funding towards the execution of our network expansion with planned capex of Rs 500 to 550 billion over next 3 years. The impact of recent tariff interventions can be seen in improved ARPUs and revenue for the quarter, though the full impact will be reflected over the next couple of quarters. Further tariff rationalisation is needed for the industry to fully cover its cost of capital," Moondra said.
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4G Expansion and Network Enhancements
During the quarter, the telco added around 42,000 4G sites, its largest-ever addition in 4G sites in a quarter. It also enhanced the network by deploying 4G on the sub GHz 900 band across around 20,500 sites, including site expansion on recently acquired 900 MHz spectrum in some circles, offering superior indoor network experience and increased coverage.
"We also added around 21,200 sites in the 1800 MHz and 2100 MHz bands mainly to increase the network capacity resulting in customers experiencing faster data speed on Vi GIGAnet network," the telco said.
The telco shut down around 19,700 3G sites, and its overall broadband site count stood at around 439,600 as of September 30, 2024. Due to the rapid shutting down of 3G sites across circles, 3G sites are present in only 8 circles as of September 30, 2024, the operator said.
"We have deployed around 74,750 TDD sites, around 13,950 Massive MIMO sites and around 13,250 small cells till date. Further, we expanded our LTE 900 presence to 16 circles out of 17 priority circles," the telco said.
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Vodafone Idea said, its 4G expansion is in progress, and the company is targeting to achieve 4G population coverage of 1.1 billion by March 2025 and 1.2 billion by September 2025. The rollout of 5G in key geographies will begin by Q4FY25.
