Troubled telecom operator Vodafone Idea’s April-June quarter losses mounted more than five times on an year-on-year basis due to its provisioning for exceptional losses, including adjusted gross revenue. India’s third-largest telecom operator posted its eighth consecutive loss of 254 billion rupees (US$3.39 billion) as against 49 billion rupees ($654 million) in the same period last year.
In a regulatory filing, the company said its revenue from operations came in at 106.59 billion rupees for the first quarter of FY2021, against 113 billion rupees in the same period of the previous year.
The company said it has recognized an additional charge of 194 billion rupees in the June quarter towards adjusted gross revenue liabilities and the estimated recognized liability of 460 billion rupees as on March 31, 2020.
The company said the first-quarter numbers were impacted by the nationwide coronavirus lockdown as prepaid customers were unable to recharge their accounts due to the closure of shops. However, the total data volumes grew to 4,523 billion MB, its strongest growth in the last six quarters.
The number of subscribers declined to 270.9 million in the June quarter. However, the company’s subscriber churn reduced to an all-time low of 2% (3.3% in Q4FY20), as net disconnections were lower during the quarter.
The average revenue per user declined to 114 rupees against 121 rupees in the preceding quarter ended March 31. Its 4G subscriber base stood at 104.6 million at the end of the June quarter.
The telecom operator has been struggling to survive amid predatory competition unleashed by a recent entrant – Reliance Jio Infocomm, owned by India’s richest man, Mukesh Ambani. Reliance Jio’s launch in 2016 led to the erosion of the subscriber bases of both Vodafone and Idea, which decided to merge and jointly fight the new entrant. The joint venture also ended up shedding millions of subscribers.
In addition, Vodafone Idea has to pay around 530 billion rupees ($7.45 billion) for its license fee, spectrum usage charge, interest and penalty dues to the telecommunication department. This was the result of a 14-year-old court battle between the telecommunications department and the companies over what should be the scope of adjusted gross revenue.
The telecom companies had argued that only core items should be considered when assessing revenue, whereas the telecommunications department contended that income from non-core items should also be taken into account. The Supreme Court favored the latter, forcing all mobile-phone services to fork out huge sums to the government and Vodofone Idea was slapped with the highest payout.