Vodafone Idea Q1 result: Net loss widens to ₹25,460 crore due to AGR provisions
2 min read . Updated: 06 Aug 2020, 05:46 PM IST- Average revenue per user declined to ₹114 in the April-June quarter from ₹121 in January-March quarter
Home >Industry >Telecom >Vodafone Idea Q1 result: Net loss widens to ₹25,460 crore due to AGR provisions
MUMBAI : Vodafone Idea Ltd (VIL) on Thursday reported a net loss of ₹25,460 crore during Q1FY21, higher than ₹11,643 crore reported in Q4FY20. The telecom operator's revenue stood at ₹10,659 crore during the period under review, down 9.3% sequentially from ₹11,754 crore. Net loss against exceptional items stood at ₹5,537 crore.
Losses were far higher than estimates as the company recognised provision of ₹19,440 crore towards the adjusted gross revenue (AGR) related dues. The company also made additional provisions towards spectrum charges and other integration and merger costs.
According to a poll of Bloomberg analysts, VIL was expected to report ₹11,006.9 crore and loss of ₹5,545.9 crore for the quarter ended 30 June.
Average revenue per user (ARPU) declined to ₹114 in the April-June quarter from ₹121 in January-March quarter -- lower than ₹119 estimated by the analysts.
EBITDA (earnings before interest, tax, depreciation and amortization) for the June quarter declined 6.4% sequentially to ₹4098 crore. The impact of sharp dip in the revenue on EBITDA was largely offset by reduction in subscriber acquisition costs due to lower gross additions during the quarter, marketing costs and other expenses as well as other cost optimisation initiatives.
Subscriber churn reduced to an all-time low of 2.0% in the period under review from 3.3% in Q4FY20, as net disconnections were lower during the June quarter. However, the gross additions were severely impacted by closure of retail stores during the nationwide lockdown, due to which the subscriber base declined to 279.8 million in Q1FY21 from 291.1 million in Q4FY20.
Ravinder Takkar, MD & CEO, Vodafone Idea Limited, said “During the nationwide lockdown due to covid-19 pandemic, our teams did a phenomenal job of providing seamless high quality services, keeping people and businesses connected during these unprecedented times. Q1FY21 was a challenging quarter as availability of recharges due to store closure and ability of customers to recharge on account of economic slowdown were impacted."
So far, rivals Reliance Jio and Bharti Airtel have reported good traction from tariff hikes introduced in Q3 FY20. Bharti ARPU has increased by 22.7% since 2QFY20, while Jio’s ARPU has advanced 16.9%.
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