Vodafone Idea (Vi) recently announced the results for the second quarter of fiscal year 23. The telecom operator reported a loss of Rs.7529.5 crore. The loss widened compared to Rs 7,295.7 crore in the first quarter. Vi said its quarterly revenue grew again, but there was no positive impact on net income. What’s really troubling for the carrier at the moment is the high rate of slowdown. Vi needs as many paying subscribers as possible in order to get started. In the past six quarters, Vi’s subscriber momentum has not crossed the 3.5% threshold, which was still very high. But in the second quarter of fiscal year 23, the rate of change was reported at 4.3%. This is very high, especially when carriers need more high ARPU clients.
The number of active Vi customers decreased from 218.7 million in the first quarter to 212.2 million in the second quarter. But amid all this, Vi said it added 1.6 million new 4G subscribers during the month. So, the 4G subscriber base isn’t declining, and that’s a good thing. Average telecom revenue per user (ARPU) grew to Rs 131 from Rs 128 in the previous quarter.
ICICI Securities said the good growth in the company’s ARPU for Vi came on the back of lower 2G subscribers. The telecom company lost a net 6 million users during the quarter, bringing its subscriber base to 234 million. At the same time, Vi’s postpaid subscriber base grew by 0.7 million to reach 20.9 million, mainly driven by mobile and M2M/IoT users.
What’s really frustrating is the fact that total minutes usage went from 450 billion in the first quarter to 428 billion in the second. He’s been falling back through the seasons constantly. By the end of the quarter, Vi’s net debt had grown to 2,201 billion rupees. Net debt rose by 200 billion due to 5G spectrum auctions, which cost about 188 billion rupees, the rest being unpaid interest on receivables.
One of the most important things that ICICI Securities noted was that “the company was facing capital constraints, but it is in a much better position than the telecom companies that went out of business in the not too distant past in India.”
This means that Vodafone Idea will continue to do business. The government will also ensure that there is no duopoly scenario in the country.