Vodafone Idea shares jump as Q3 loss narrows, ARPU improves
What's the story
Vodafone Idea has reported a narrower net loss of ₹5,286 crore for the December quarter. The figure is an improvement over the net loss of ₹6,609 crore in the same quarter last year and also lower than the previous quarter's loss of ₹5,524 crore. Following the news, Vodafone Idea shares jumped nearly 2% to ₹10.01. The reduction in losses was aided by exceptional items, including provision write-backs on remeasurement of settlement assets with its promoter Vodafone Group.
Financial performance
Revenue from operations increases, surpassing estimates
Vodafone Idea's revenue from operations grew marginally by 2% year-on-year and 1.15% quarter-on-quarter to ₹11,323 crore. This figure exceeded Bloomberg's estimate of ₹11,297 crore. The slight increase in revenue can be attributed to the company's network expansion and rising data consumption on its network.
Management statement
CEO comments on resolution of key legacy issues
Abhijit Kishore, the company's CEO, said this quarter marked an important inflection point for Vodafone Idea with the positive resolution of key legacy issues. He thanked the government for providing a definitive and long-term solution on the AGR matter. The company also settled a receivable of ₹6,394 crore with its promoter Vodafone Group during this period.
Subscriber trends
Subscriber base and ARPU witness changes
Vodafone Idea's subscriber base fell by 3.8 million to 192.9 million at the end of December. The company's average revenue per user (ARPU) grew 3% sequentially to ₹172 a month, driven by consumer upgrades. Meanwhile, its 4G/5G subscriber base improved marginally to 128.5 million from the previous quarter's figure of 127.8 million, reflecting the company's network expansion efforts during this period.
Funding efforts
Company secures funding for capital expenditure plans
Vodafone Idea is currently in talks with lenders to secure debt financing for its larger capex plans of ₹50,000-55,000 crore. Last month, the company raised ₹3,300 crore through secured non-convertible debentures (NCDs) via its subsidiary Vodafone Idea Telecom Infrastructure Ltd (VITIL). The proceeds will be used by VITIL to repay historical dues to Vodafone Idea and strengthen its capital expenditure for business growth.