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Vodafone Idea, a prominent Indian telecom operator, has announced a smaller-than-expected loss for the first quarter of the fiscal year, ending June 30. The company reported a consolidated loss after tax of ₹64.32 billion ($766.4 million), a decrease from ₹78.40 billion recorded in the same quarter last year. Analysts had anticipated a loss of ₹75.76 billion, according to data from LSEG.
The reduction in the company’s loss was primarily due to a major drop in expenses, which fell by 7% to ₹171.91 billion. This decline was driven by lower finance costs, reduced network expenses, and decreased license fees. Despite this, Vodafone Idea’s revenue slipped by 1.4% to ₹105.08 billion, missing analysts’ expectations of ₹105.92 billion.
In terms of subscriber metrics, Vodafone Idea saw a 3% year-on-year increase in its 4G subscriber base, reaching 126.7 million as users continued to shift from 2G. However, the total subscriber base dropped by about 5.1% to 210.1 million. The company, which emerged from the merger of Vodafone Group’s Indian arm and Aditya Birla Group’s Idea Cellular in 2018, has struggled with consistent losses, facing stiff competition from larger rivals like Bharti Airtel and Reliance Jio.
In April, Vodafone Idea secured approximately ₹200 billion in funding to bolster its 4G infrastructure and initiate 5G services. The company aims to expand its 4G coverage by around 16 million users by the end of September 2024. Its average revenue per user (ARPU) rose by 5% to ₹146, although it remains lower compared to Jio’s ₹181.7 and Airtel’s ₹211. The recent tariff hikes in late June, the first in three years, have been a common strategy among the major telecom players to boost revenues.
Both Airtel and Jio have reported positive results recently, buoyed by robust subscriber additions and improved financial performance.