Vodafone Idea to pump in Rs 25,000 cr, reports Rs 4,973 cr loss
Mumbai: In its maiden earnings announcement as a joint entity, Vodafone Idea reported a consolidated loss of Rs 4,973 crore for the September quarter and announced a fund infusion of Rs 25,000 crore to help it take on cut-throat competition.
The entity, which became the largest telco with 422 million subscribers after the merger on August 31, reported consolidated revenue of Rs 7,663 crore.
Of the Rs 25,000 crore of fresh capital infusion, Vodafone will pump in Rs 11,000 crore into the new company, and the Birla group that owned Idea will infuse Rs 7,250 crore, the company said, indicating that the promoters are ready for a long haul and willing to fight.
The numbers for the reported quarter include results for Idea Cellular up to August 30, and for Vodafone Idea from August 31 to September 30 and hence these are not comparable, the companies said in a statement.
The pro-forma revenue derived without considering the alignment of accounting policies, stood at Rs 12,023 crore, the company said.
At Rs 4,973 crore of losses, this is the worst show by any operator in the quarter.
The company, however, continued to face difficulties because of competition, which was visible both in a 4.7 per cent decline in average revenue per user to Rs 88 (which is the lowest among the private sector telcos) compared to the preceding quarter, and also a 13 per cent migration to competition.
Jio had reported an ARPU of Rs 131.7 (down from Rs 135 YoY) and a net profit of Rs 681 crore, while Airtel’s Arpu was massively down to Rs 101 from Rs 142 YoY while its net income fell steep 65.7 per cent to Rs 118.80 crore.
The merger was announced a few months after the entry of the deep-pocketed Reliance Jio, whose aggressive pricing and freebies impacted the financials of all the industry, which has even seen bankruptcies and asset sell-offs.
On the capital raising plans, it said, “A committee will be evaluating various options including, but not limited to, a rights issue, qualified institutional placement and/or a preferential share issue. It is currently expected that any capital raising, if approved, is expected to be completed in the March quarter,” it said.