Operationally, the joint venture between UK’s Vodafone and India’s Aditya Birla Group, continued to battle with operational challenges. The telco’s average revenue per user (ARPU) — a key performance metric — remained flat sequentially at Rs 146, even though the full impact of the recent headline rate hikes will flow in only from the fiscal second quarter. But there was a marginal rise in 4G user base that boosted data usage sequentially.
“Post the recent equity raise, we are in the process of expanding our 4G coverage and capacity as well as launch of 5G services,” Vi chief executive Akshaya Moondra said in an official statement Monday. “Some capex has already been ordered and under execution, basis which we expect around 15% increase in our data capacity and an increase in 4G population coverage by around 16 million by end Sep’24.”
Vi’s quarterly revenue declined 0.93% sequentially to Rs 10,508 crore, hit by continued customer losses, underlining its continuing inability to compete with bigger rivals, Reliance Jio and Bharti Airtel, who have both launched 5G services nationally.Loss-making Vi ended the June quarter with 210.1 million subscribers compared with 212.6 million in the January-March period. But, its 4G subscribers base grew marginally from 126.3 million by March-end to 126.7 million by June. Subscriber churn – or users leaving its network – increased to 4% from 3.9%.“Vi’s on-quarter fall in revenue has been caused by continuing subscriber losses but the telco appears to have managed its finance costs well, reflected in the sharp sequential fall in interest & net finance costs as well as lower depreciation & amortisation costs, which has helped it sharply narrow its net loss in the fiscal first quarter,” Rohan Dhamija, head (India & Middle East) at Analysys Mason, told ET.Vi’s interest and financing cost fell significantly by 15.8% sequentially to Rs 5262 crore in the June quarter. Its trade payables were also down 4.9% sequentially to Rs 13,060.8 crore, reflecting recent part-payments of old dues to Indus Towers, said analysts.
Vi’s net finance costs fell 14.1% sequentially to Rs 5370 crore in the June quarter.
The telco’s shares closed 0.62% lower at Rs 16.01 on the BSE Monday. The quarterly results were announced after market hours.
More 4G users meant that average data usage increased sequentially in the June quarter to 15.96 GB per month from 15.81 GB a month. But, Vi’s average minutes of use per subscriber have decreased to 607 minutes from 627 minutes in the March quarter.
Having already raised around Rs 24,000 crore via the equity route, the cash-strapped telco is also in discussions with a consortium of banks to raise upto Rs 25,000 crore and additional non-fund based facilities of upto Rs 10,000 crore, the company had said previously.
The telco said that recent fundraise will enable it to “conclude negotiations with its lenders, vendors and DoT for continued support; and generation of cash flow from operations that will enable it to settle its liabilities as they fall due.”
The telco’s cash and bank balance increased substantially to Rs 18,150 crore as of June 30, 2024, on account of the recent fundraise.
“Our current capex needs are being met out of equity funds. We are engaged with our lenders for tying up debt funding towards the execution of our network expansion with a planned capex of Rs. 500 to 550 billion over next 3 years,” Moondra said in his statement.
During the June-ended quarter, Vi’s capex spends saw a sequential rise to Rs 760 crore versus Rs 550 crore in the March quarter. This, however, is substantially less than Airtel which incurred a capex at Rs 6782 crore in Q1FY25. Meanwhile for Jio, brokerage firm IIFL Securities pegs its network opex at Rs 7923 crore in the fiscal first quarter.
Vi has previously said the funds raised via debt and equity will be used primarily for around Rs 55,000 crore of capex over the next three years for expanding its 4G operations and rolling out greenfield 5G networks.
The loss-making telco’s net debt included deferred spectrum payment obligations of Rs 1.39 lakh-crore, adjusted gross revenue (AGR) related dues of Rs 70,320 crore and optionally convertible debentures amounting to Rs 1610 crore.
Debt from banks and financial institutions (FIs) though increased to Rs 4650 crore in the fiscal first quarter, from Rs4040 crore in the fiscal fourth quarter.
Existing debt payable by June 2025, is Rs 2690 crore, excluding amounts classified as current on account of not meeting certain covenant clauses.
