Vodafone Idea second quarter net loss narrows to Rs 7,175 crore, ARPU rises to Rs 156

Vodafone Idea Ltd’s losses narrow to $7,175 crore in the September quarter, lower than $8,746 crore in the same period last year, revenue edged up to $10,932 Crores Rs. $10,716 Crores. However, the troubled telecom operator continues to push for further rationalization of tariffs across the industry, citing the need to cover capital costs.

Average revenue per user (Arpu), a key profitability metric, rose to $156 from $142 a year ago $It was 146 in the previous quarter, driven by the implementation of tariff increases in June and the real impact that came into effect from the September quarter.

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Arpu’s growth reflects broader trends in the Indian telecom industry, with all major players benefiting from across-the-board price increases of 10-21%. While larger rivals Reliance Jio and Bharti Airtel have increased entry-level 5G tariffs by more than 45%, Vodafone Idea has benefited from the increase in 4G tariffs.

As of September, Vodafone Idea’s user base was 205 million, including 126 million 4G users, down from 219.8 million last year. The main reason for the decline is the integration of SIM cards following the tariff increase.

“The impact of the recent tariff intervention can be seen in the improvement in ARPU and revenue during the quarter, although the full impact will be reflected in the coming quarters. The industry needs to further rationalize tariffs to fully cover its cost of capital.” Vodafone Idea said CEO Akshaya Moondra.

Moondra echoed the stance of Jio and Airtel, both of which support further hikes in tariffs to improve return on capital for operators.

Financing and capital expenditure planning

Vodafone Idea, backed by Aditya Birla Group, is currently in discussions with lenders to secure $Debt financing of Rs 35,000 crore to fuel its network expansion.

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“In terms of debt raising, we are still in touch with the lenders and will use the debt funds to execute our network expansion plan, with planned capital expenditure of Rs 100 cr. It will be 500-550 billion US dollars in the next three years.” Moondra said.

According to Moondra, the operator has made significant progress in network capabilities, expanding 4G data capacity by 14% and covering an additional 22 million people. This increases 4G speeds by 18%.

Vodafone Idea has also signed long-term contracts worth $3.6 billion with Nokia, Ericsson and Samsung to ensure equipment supply for the next three years.

Nokia said in a separate statement on Wednesday that it plans to add 3,300 new sites and upgrade more than 42,000 technology sites by March 2025. Vodafone Idea network has completed around 25,000 spectrum extensions, enhancing data capacity. To date, 15% of the new sites have been completed.

Earlier this year, loss-making Vodafone Idea raised funds $Equity issue worth Rs 24,500 crore through India’s largest follow-on public issue (FPO) $Offers Rs 2,460 crore in lieu of dues and value preference shares to equipment vendors Nokia and Ericsson $Rs 2,080 crore was provided to its promoter groups.

The new funding will be used to fund 4G expansion in 17 priority circles, the rollout of 5G in major cities and wider capacity upgrades to meet growing data demand. Vodafone Idea plans to launch 5G services in Delhi and Mumbai in December, aiming to cover 15,000 sites by March 2025, Mint reported last month.

Earnings before interest, taxes, depreciation and amortization (Ebitda) rose to $45.5 billion, and the Ebitda margin for the quarter was 41.6%. Capital expenditures for the quarter were $1,360 crore – the lowest among peers despite signing extensive network expansion agreements.

The telco reported the addition of 42,000 4G sites, marking its largest-ever quarterly increase in 4G coverage. Vodafone Idea is also enhancing its network by deploying 4G in the sub-GHz 900 band at 20,500 sites, including upgrading the recently acquired 900 MHz spectrum in certain circles. This improves indoor coverage and increases capacity, with an additional 21,200 sites in the 1800 MHz and 2100 MHz bands to support faster data speeds.

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As of September, the company had reduced its 3G coverage, closing 19,700 3G sites, leaving only eight circles of coverage. It is reported Mint Last month, Vodafone Idea was expected to completely phase out 3G services by April next year.