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Vodafone Idea under selling pressure post Q3 numbers; SC verdict
(13:37, 14 Feb 2020)
On a consolidated basis, Vodafone Idea reported net loss of Rs 5,807.24 crore in Q3 December 2019 as against net loss of Rs 31,773.48 crore in Q2 September 2019. Net sales rose 2.18% to Rs 11,076.20 crore in Q3 December 2019 over Q2 September 2019, primarily supported by strong 4G additions driving average revenue per user (ARPU) improvement.

ARPU inched up to Rs 109 in December-end from Rs 107 at the end of September, supported by improved customer mix. The subscriber base declined to 304 million in Q3 December 2019 from 311 million in Q2 September 2019. Subscriber churn further reduced in Q3 December 2019, reaching 3.3% compared to 3.5% in Q2 September 2019 and 3.7% in Q1 June 2019.

Pre-tax loss stood at Rs 6421.40 crore in Q3 December 2019, lower than pre-tax loss of Rs 36959.20 crore in Q2 September 2019 and pre-tax loss of Rs 7004.30 crore in Q3 December 2018.

EBITDA was almost flat at Rs 3,420.50 crore in Q3 December 2019 compared with Rs 3,395.60 crore in Q2 September 2019. EBITDA margin stood at 30.8% in Q3 December 2019 as against 31.3% in Q2 September 2019.

Annually, the company reported net loss of Rs 5,807.24 crore in Q3 December 2019 as against net loss of Rs 4,203.97 crore in Q3 December 2018. Net sales declined 5.75% to Rs 11076.20 crore in Q3 December 2019 over Q3 December 2018.

Gross debt (excluding lease liabilities) as of 31 December 2019 was Rs 1,15,850 crore, including deferred spectrum payment obligations due to the government of Rs 88,530 crore. Cash & cash equivalents were Rs 12530 crore and net debt stood at Rs 1,03,310 crore (versus Rs 1,01,910 crore in Q2 September 2019). Capex spend in Q3 December 2019 was Rs 3,330 crore compared to Rs 2,140 crore in Q2 September 2019.

The merger of Indus Towers and Bharti Infratel is awaiting regulatory approval from the Department of Telecommunications (DoT), having received all other required approvals. The long stop date on the original agreement has been further extended to 24 February 2020. Vodafone Idea plans to monetize its 11.15% stake in Indus on completion of the Indus-Infratel merger. The company is also exploring the options to monetize nearly 160,000 kilometers of intra-city and inter-city fibre as well as its data centre, the company stated in a release.

Ravinder Takkar, MD & CEO, Vodafone Idea, said We continue to actively engage with the government seeking relief on the AGR and other matters. At the same time, we remain focused on rapid network integration as well as 4G coverage and capacity expansion in our key markets. We now lead the league tables on 4G data download speeds across several states, metros and large cities. We believe this is leading to improved customer experience which has contributed to robust 4G subscriber additions. As a result, after several quarters of pressure on topline, we witnessed consistent revenue turnaround from September onwards i.e. before the recent price hikes. The tariff increase effective December should further help in improving revenue performance going forward. We are currently on track to deliver our opex synergy targets by Q1 June 2020.

The Supreme Court (SC) on Friday (14 February) rejected the plea by mobile carriers seeking more time to settle adjusted gross revenue (AGR) dues. SC directed telecom providers to pay their AGR dues to department of telecommunications (DoT) by the next court hearing on 17 March 2020. A bench comprising Justices Arun Mishra, Abdul Nazeer and M R Shah had assembled today to hear a batch of fresh petitions filed by telecom companies seeking more time for payment of AGR dues.

The court made scathing observations on the conduct of the telecom companies as well as the DoT for ignoring its 24 October verdict that had directed the firm to pay AGR dues to DoT by 23 January 2020.

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