Debt-laden telecom operator Vodafone Idea Ltd reported a wider-than-expected loss for the second quarter on Thursday, hit by a continued decline in subscribers and higher expenses.
The consolidated loss after tax widened to 75.96 billion Indian rupees ($916.14 million) for the three months ended Sept. 30, from 71.32 billion rupees, a year ago. Analysts, on average, expected the company to incur a loss of 69.25 billion rupees.
Vodafone Idea said its subscriber base declined to 234.4 million from 240.4 million in the first quarter, while total expenses rose 10% to 183.02 billion rupees.
However, its average revenue per user (ARPU), a key performance indicator for telecom firms, saw a rise of 19.5% to 131 rupees helped by tariff hikes. In the previous quarter, ARPU stood at 128 rupees.
ARPU of larger rivals Reliance Jio and Bharti Airtel was at 177.2 rupees and 190 rupees in the quarter, respectively.
Vodafone Idea, a merger between the Indian unit of Vodafone Group and Aditya Birla Group’s Idea Cellular, was formed in 2018 to withstand Reliance Jio’s price war that disrupted the domestic telecom industry.
Vodafone Idea, however, has been posting losses since then, with subscribers switching to the bigger rivals. Burdened with massive government debt and spectrum dues, it has been unable to strike a fund raising deal.
The company was in continued talks with lenders and investors for fund raising for network expansion and 5G rollout, Chief Executive Akshaya Moondra said in a statement. The company’s net debt stood at 2.2 trillion rupees as of September end. Revenue from operations rose 12.8% to 106.15 billion rupees.
In January, Vodafone Idea’s board approved conversion of the interest on dues into equity after the government announced a relief package for the sector. Post the conversion, the government will have a 35.8% stake in the company.
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