NEW DELHI: Vodafone Idea ltd, India’s largest telecom operator, on Monday reported a consolidated loss of Rs 4,881.9 crore for the fourth quarter ended March 31. The telecom service provider created by the merger of Idea and Vodafone had reported a net loss of Rs 5,004.6 crore during the third quarter of 2018-19.
Losses for the firm narrowed in the quarter as its average revenue per user (ARPU) grew by 16.3 per cent QoQ to Rs 104 crore in the March quarter from Rs 89 crore in December quarter. Revenue remained flat at Rs 11,775 crore in the March quarter, but is higher than that of rivals firms Bharti Airtel and Reliance Jio.
“The strategic initiatives taken post-merger to improve revenue and ARPU have started to become visible. The average daily revenue for the quarter grew 2.3 per cent QoQ after witnessing successive decline for the prior 11 quarters, benefitting from the introduction of ‘service validity vouchers’”, the operator said.
The voucher requires customers to make a minimum recharge of Rs 35 (28 days’ validity). However, its decision to introduce the minimum recharge package reduced its user base by 53.2 million subscribers as ‘Incoming only’ or ‘Low ARPU’ subscribers migrated their spending from multiple SIMs to a single SIM, taking the overall subscriber base to 334.1 million.
The quarterly result posted by Vodafone Idea and even by Bharti Airtel indicate the difficulty the sector faces in registering profits. Since the entry of Mukesh Ambani’s Reliance Jio in the telecom sector, offering data and calling services at throwaway prices, many operators have shut or merged their operations to face the challenge.
To face the Jio onslaught, operators are raising funds or monetising their funds, which has resulted in higher debts. Vodafone Idea recently closed India’s largest rights issue, raising Rs 25,000 crore equity.
For the future, the firm said it would focus on fortifying its position in profitable districts.