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Vodafone Idea Q1 net loss widens, promoter to infuse Rs. 2,000 cr.


Vodafone Idea's net loss for the fiscal first quarter widened sequentially as it continued to lose subscribers and pay more in interest. Vodafone Idea reported a 7.4 percent increase in Y-o-Y losses for the first quarter of FY24 to Rs. 7,840 crore.

The most important figure that any analyst watches in telecom companies is the rise or fall in subscriber bases. Vodafone Idea's total subscriber base has reported shrinkage both on a quarterly basis and on a year-on-year basis. On a Q-o-Q basis, the company reported a 1.9% fall in subscriber base, and on a Y-o-Y basis, the company reported a 7.9% fall in subscriber base. Pre-paid subscribers in comparison to total subscriber bases have seen a fall in q-o-q basis from 90.1% in the previous period to 89.7% in the current period. The 4G subscriber base continued to grow for the eighth consecutive quarter and stood at 122.9 million as of June 30, 2023, vs. 122.6 million in Q4 FY23.

Another important number that investors and analysts observe is the average revenue per user (ARPU). ARPU has shown growth on a Q-o-Q and Y-o-Y basis. The ARPU has been the highest for the last five quarters. On a quarterly basis, ARPU rose by 2.9 percent, from 135 to 139 in the current quarter. ARPU increased by 8.5% year over year.

In April, Kumar Mangalam Birla, chairman and promoter of Aditya Birla Group, holding 18.1% of the company, returned to the company's board, raising hopes that the Birla Group might infuse money. In the recent quarterly earnings filing, Vodafone Idea said, "In the event of any fund requirement for meeting impending payment obligations, one of the promoters has confirmed that it shall provide direct or indirect financial support to the extent of Rs 2000 crore."

Revenue for the quarter stood at Rs. 10660 crore, a Q-o-Q improvement of 1.2% aided by subscriber mix and 4G subscriber additions. Its expenses rose 4% year-on-year to Rs 18,513 crore, outpacing a 2.4% rise in revenue to Rs 10,656 crore.

The total gross debt (excluding lease liabilities and including interest accrued but not due) as of June 30, 2023 stood at Rs. 2,11,760 cr, comprising deferred spectrum payment obligations of Rs. 1,33,740 cr and AGR liabilities of Rs. 66,860 cr that are due to the government, debt from banks and financial institutions of Rs. 9500 cr, and optional convertible Debentures amounting to Rs. 16.6 billion. The net debt stood at Rs. 2,11,510 crore. Capex spend for the quarter stood at Rs. 450 crore.

Continued losses in subscribers and cost constraints are expected to keep Vodafone Idea in the red in the quarter ended June 2023.

As of June 30, 2023, the Government of India stands to be the biggest shareholder on an individual basis, representing 33.1% of the total shareholding in the company. Whereas combined promoter holding stands at 50.4%.

Shares of the Vodafone idea made a gap-down opening and are trading at a loss of 2.9% at Rs. 7.85.

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