Vodafone Idea’s losses widened to Rs 25,460 crore for the first quarter of FY20, an increase of 422% as compared to a loss of Rs 4,873.90 crore for the corresponding quarter a year ago. It had reported a loss of Rs 11,643 crore in the previous quarter (Q4 of FY20). The company said that its revenue for the quarter also declined by 9.3% to Rs 10,660 crore on account of large scale lockdown and disruption of economic activities.
The company, which has been seeing high subscriber churn, said that the lockdown (which was most of the April-June quarter) “severely impacted” additions as retail closures were closed. Its subscriber base declined from 291.1 million in Q4 of FY20 to 279.8 million in Q1 of FY21.
The company’s Average Revenue Per User (ARPU) declined from Rs 121 in Q4 to Rs 114 in Q1.
Vodafone’s capital expenditure spend in Q1FY21 of Rs 600 crore was lower compared to Rs 1,820 crore in Q4FY20, as the rollout in Q1 was impacted by COVID-19 with disruptions to equipment supply and logistics following the nationwide lockdown.
The telecom operator’s gross debt (excluding lease liabilities) as of June 30, 2020 was Rs 11,89,400 crore, including deferred spectrum payment obligations that is due to the Union government of Rs 9,22,700 crore. Cash and cash equivalents were Rs 34,500 crore and the net debt stood at Rs 1,15,500 crore (as compared to Rs 1,12,520 crore in Q4FY20).
The company also said that it has put in place a cost optimisation initiative, now that the integration of erstwhile Vodafone India and Idea Cellular is now nearly complete, with Vodafone Idea realizing its targeted annualized operational expenditure synergies of Rs 84 billion well ahead of the original timeline.
“Having successfully achieved these synergies, we have rolled out a further cost optimization plan across the company in line with the evolving industry structure and business model. Through this exercise, we plan to achieve Rs 40 billion of annualized cost savings over next 18 months. As a step in that direction, we are in the process of organization-wide restructuring, which will transform the company into a lean and agile ‘fit for future’ workplace,” the company said in a statement.
At the end of the quarter, the 4G subscriber base was 104.6 million, Vodafone Idea said. Total data volumes grew by 10.6% (40.4% YoY), to 4,523 billion MB compared to the last quarter, being the highest growth in the last 6 quarters. Total minutes on the network declined by 6.0% during the quarter.
The company said that it witnessed a data volume growth of 10.6%, also the highest in the last six quarters. Data usage per broadband subscriber increased to 13 GB per month.
The government informed the Supreme Court in the last hearing that Vodafone Idea now owes Rs 50,399 crore in Adjusted Gross Revenue (AGR) dues, after paying up Rs 7,854 crore. Vodafone Idea has asked for a 15-year timeline to pay off its dues, which the court has reserved its order on, and is expected to give an order soon.
However, Vodafone Idea reiterated that the company’s ability to continue as a going concern depends on a positive outcome.
“It is to be noted that our ability to continue as a going concern is essentially dependent on a positive outcome with regard to the timeframe for the payment of AGR dues to be made in instalments and successful negotiations with lenders. Pending the outcome of the above matters, these consolidated financial results have been prepared on a going concern basis,” it said.
Vodafone Idea said that based on the court’s decision that AGR dues will not be revised, it recognised Rs 19,440 crore as an exceptional item in Q1 towards its AGR liabilities. This, it said, was in addition to the Rs 46,000 crore it recognised in the previous quarter.