Mumbai: Vodafone Idea (Vi) sharply narrowed its net loss to Rs 4540.8 crore for the fiscal third quarter, compared with Rs 7203.4 crore in the second quarter of the fiscal, on the back of a cost optimisation plan and as it added more 4G users.
The struggling telco also managed to harness its customer losses to two million , a stark contrast to the 8.01 million in the previous quarter.
"After successfully achieving targeted merger opex synergies of Rs.8400 crore, we embarked on a cost optimization exercise across the company in line with the evolving industry structure and business model. We target to achieve Rs4,000 crore of annualized cost savings by end of this calendar year," the operator said in a statement on Saturday. "Through several initiatives, we have already achieved ~50% of the targeted annualised savings on a run-rate basis by the end of Q3FY21 ," it added.
However , the third largest telco has reiterated the risks that continue to plague it. " The company's ability to continue as a going concern is essentially dependent on successful negotiations with lenders and its ability to generate the cash flow from operators that it needs to settle/refinance its liabilities and guarantees as they fall due," it said.
The quarterly losses narrowed also on the back of a one-time gain of Rs 2,118.9 crore , on account of the sale of its 11.15% stake in Indus Towers to the merged Bharti Infratel-Indus Towers entity.
The company – which reported its tenth successive three-month period in red - clocked in a revenue of Rs. 10,890 crore about 1% growth from the earlier quarter. The revenue growth was aided by improved 4G additions , which is becoming the high tariff customer pool for the three rivals - Reliance Jio, Bharti Airtel and Vi.
The company which was borne from the merger of Idea Cellular and Vodafone India in 2018, has reported a subscriber base of 269.8 million in the December end quarter. In this there is a subset of109.7 million customers who are 4G subscribers-a growth of 3.6 million from the earlier three months.
"We remain focused on executing our strategy, and our cost optimization plan remains on track to deliver the targeted savings. The Board has approved funds raising to support our strategic intent and we are in active discussions with potential investors," said managing director and CEO of Vi,Ravinder Takkar.
The company, which plans to raise Rs25,000 crore via a mix of equity and debt, said it is in "active discussions with potential investors". According to reports, Vi is in talks with a consortium backed by Oaktree Capital to raise the funds.
Besides this, the company sold 11.15% stake in Indus Towers to the merged Bharti Infratel-Indus Towers entity, but the expected proceeds fell to about Rs3,800 crore from the Rs4,000 crore.
"Out of the considerations received from Infratel, VIL has made a prepayment of Rs. 2,400 crore to the merged tower entity, which will be adjusted in line with the terms of the agreement," the telco stated.
The telco posted an average revenue per user (ARPU) - a key performance parameter – of Rs 121 compared with Rs 119 in the previous quarter, helped in part by the December price hikes and more subscribers moving up the tariff plans. Rival Bharti Airtel and Reliance Jio Infocomm (Jio) posted ARPUs of Rs 166 and Rs 151 respectively.
The telco said that its network investments have led to the improved ARPU and 4G base.
The data volumes grew by 3.4% on quarter, driven by higher 4G additions. Total minutes on the network declined by 1.5% during the quarter compared to 4.0% decline in the second quarter of the fiscal- a testimony to improved network.
Vi as of December end has a net debt of Rs. 1,17,080 crore and its capex spending was Rs. 970 crore in the December end quarter, compared to Rs. 1040 crore when compared sequentially.
It has to pay statutory dues of Rs 50,400 crore to the government but has moved Supreme Court pointing out errors in calculations by the telecom department.
Vi will now enter the battle arena of spectrum auction with its rivals in March.
ET has reported that the telco has so far submitted Rs 475 crore to the Department of Telecommunications (DoT) as earnest money deposit for the upcoming spectrum auction. Although markets do not expect Vi to bid much since it has excess spectrum, it may renew some of its airwaves.
The telco informed the DoT that it has a negative networth of Rs 43,474.70 crore at end-September, 2020, while Jio and Bharti Airtel's net worth stood at Rs 1,79,617 crore and Rs 71,303.1 crore respectively as of end-December 2020, according to ownership-related submissions filed by the three private telecom carriers while applying for the upcoming 4G spectrum sale, starting March 1.
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