Vodafone Idea posts consolidated loss of Rs 4,882 crore for Q4 2019: Report

Vodafone Idea lags behind Airtel, Reliance Jio in sequential income growth with flat revenue.

India's largest telecom firm Vodafone Idea, in spite of reducing its losses, lagged behind its peers in sequential income growth with flat revenue in the March quarter against 4.3 percent growth of Airtel's India mobile business and seven percent growth of Jio, analysts have noted. "...with Bharti reporting 4.3 per cent quarter-on-quarter increase in its India mobile revenues, flat revenues for Vodafone Idea indicates it continues to lose market share...while Vodafone Idea continues to cut costs and realise benefits from open synergies, it also continues to lose revenue market share vs Bharti as well as Jio," Credit Suisse said in its latest report.

Jio is playing to be "India two player", Ambit Capital said adding that this severely impacts the ability of Vodafone Idea to enjoy the upsides of its rural subscriber base upgrading to smartphones.

"Revenue was....lower than peers Bharti (4.3 percent QoQ) and Jio (7 percent QoQ). However, ARPU (Rs 104) rose 17 percent quarter-on-quarter driven by the impact of minimum ARPU plans," Deutsche Bank Research said in its report.

Vodafone Idea posts consolidated loss of Rs 4,882 crore for Q4 2019: Report

Vodafone representational image.

Vodafone Idea, which recently concluded Rs 25,000 crore rights issue, is looking to monetise investments in tower venture as well as fibre assets, Deutsche Bank said adding that it believed the transactions will provide it adequate liquidity to maintain capex program and fund spectrum payments.

On Monday, Vodafone Idea posted a consolidated loss of Rs 4,881.9 crore for the fourth quarter ended March 31, 2019, amid a brutal tariff war in India's mobile market.

The loss narrowed from Rs 5,004.6 crore during the third quarter of 2018-19.

For Vodafone Idea — whose financials have been battered by intense price competition posed by the richest Indian Mukesh Ambani's Reliance Jio — the revenue from operations for March quarter of 2018-19 came in at Rs 11,775 crore, nearly flat compared to Rs 11,764.8 crore logged in the previous December quarter.

Bharti Airtel's India mobile services revenue stood at Rs 10,632.3 crore in the just-concluded quarter, up from Rs 10,189.2 crore in December 2018 quarter. For Reliance Jio, the operating revenue came in at Rs 11,106 crore, a sequential increase of seven percent from Rs 10,383 crore in the preceding quarter.

In its note post-Vodafone Idea earnings announcement, Jefferies said it expects "market repair" only in FY21 and Vodafone Idea will need further funding in FY21 to complete its capex plans.

"We believe that price hikes are unlikely in FY20 and can happen only once Jio becomes a dominant player with 40 percent-plus market share, which we expect in FY21. We expect VodaIdea market share to fall to 20 percent and Bharti to remain steady at 30 percent by FY22," Jefferies pointed out.

CLSA pointed out that while the introduction of minimum recharge plans — which require customers to make a minimum recharge of Rs 35 — did not drive up Vodafone Idea's revenues materially, it did knock off 53 million subscribers (14 percent of base) and push up Average Revenue Per User by 17 percent sequentially.

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost

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