Vi lost 12.4 mn subscribers in Q1, most since March ’20

Vodafone Idea (Vi) lost 12.4 million subscribers in the first quarter of FY22, the most since the fourth quarter of FY20, as the second wave of Covid hurt its operational and financial performance.

Vi had managed to trim subscriber losses in the third and fourth quarters of FY21. However, it lost 12.4 million subscribers and its customer base shrunk to 255.4 million in the first quarter of FY22.

Sequential fall in 4G users was modest, indicating that most of the loss was in the low-margin 2G segment. At the end of the June quarter, Vi reported 112.9 million 4G users against 113.9 million in the previous quarter. Rival Reliance Jio gained the most from Vi’s falling market share as it added 14.4 million subscribers in the first quarter.

Vi’s loss of 12.4 million in a quarter is its second highest since the fourth quarter of FY20 when it lost 12.9 million customers. Overall, in the last two years, the struggling company has lost 64.6 million customers. In contrast, Jio and Airtel have added 109.3 million and 44 million customers, respectively.

The customer base was disclosed along with the company’s financial results for the first time under new Chairman Himanshu Kapania, who took charge following the resignation of Kumar Mangalam Birla last month.

Vi has sought a moratorium from the government for its spectrum dues. Its worsening financial condition has resulted in credit rating downgrade for its long-term loans and non-convertible debentures. Its gross debt, too, has increased sequentially to ~1.9 trillion from ~1.8 trillion, including accrued interest.

The company narrowed net loss by 71 per cent to ~7,319 crore in the first quarter of FY22 on a year-on-year basis on account of lower exceptional expenses. In the same period last year, it had posted a net loss of ~25,460 crore due to provisioning for adjusted gross revenue dues.

On a sequential basis, however, it was a weak showing as the loss widened from ~7,022 crore due to lower revenue.

Gross revenue declined 14.1 per cent on a year-on-year basis to ~9,152 crore due to fall in subscribers. Sequentially, too, revenue declined 4.7 per cent from ~9,607 crore. Ebitda declined 9.5 per cent on a year-on-year basis to ~3707 crore in the first quarter. Average revenue per user (ARPU) fell sequentially to ~104 from ~107 on account of free recharges during the second wave and lower usage.

In a statement, MD and CEO Ravinder Takkar blamed the weak results to disruptions caused by the second wave. “We continue to focus on executing our strategy to keep our customers ahead and our costoptimisation plan remains on track to deliver the targeted savings. We are in active discussions with potential investors for fundraising to achieve our strategic intent,” he said. The company has targeted ~4,000 crore of annualised cost savings and has achieved around 70 per cent of its target on a run-rate basis by the end of the first quarter, he said.

Similarly, Vi said it continues to invest in increasing coverage and capacity. During the quarter, it added around 6,400 4G FDD sites, primarily through refarming of 2G/3G spectrum to expand its 4G coverage.