Reliance Jio

May 10, 2022

New On News Tariff hikes led to a slight turnaround in Vodafone Idea ’s fourth quarter earnings, as the company’ narrowed its net loss to Rs 6,545 crore. The January-March quarter loss was also lower than analysts estimates. Bloomberg consensus estimates had pegged the net loss at Rs 6,738 crore. The company had posted a net loss of Rs 7,234 crore in the preceding quarter. Tariff increases led to the average revenue per user (Arpu) rising by 7.5% quarter-on-quarter to Rs 124 from Rs 115 in the preceding quarter, though below Reliance Jio’s Arpu of Rs 167.6. Bharti Airtel is yet to announce its earnings for the fourth quarter. However, the good news is that despite the tariff hike, the company was able to arrest subscriber loss as the churn at 3.4% remained the same as the preceding quarter. It lost 3.4 million subscribers during the quarter, which was lower compared with 5.8 million subscribers lost in the quarter ended December. Tariff hikes also helped the company to post a higher revenue, up 5.4% on a sequential basis to Rs 10,240 crore. However, revenues were slightly below estimates of Rs 10,373 crore. Ravinder Takkar, MD & CEO, Vodafone Idea, said: “We are pleased to announce the third consecutive quarter of revenue growth driven by tariff interventions taken in November 2021. While the overall subscriber base has been impacted primarily on account of the tariff increase, the 4G subscriber base continued to grow on the back of superior data and voice experience offered by Vi GIGAnet. We successfully completed first tranche of fundraising in the form of preferential equity contribution of Rs 4,500 crore from our promoters. We continue to actively engage with lenders and investors for further fundraising.” At Rs 4,649 crore Ebitda was up a sharp 22% on a q-o-q basis, beating estimates of Rs 4,033 crore. It was driven by improvement in revenue which was partially offset by higher subscriber acquisition costs due to higher gross additions during the quarter. This quarter had a one-off of Rs 150 crore primarily in network & IT costs. Margins expanded 610 basis points to 45.4% against 39.3% in the preceding quarter. The company’s subscriber base declined to 243.8 million vs 247.2 million in Q3FY22, however additions to the 4G subscriber base continued as the company added 1.1 million subscribers, which was higher compared with 0.8 million additions in the December quarter. The overall 4G base is now at 118.1 million. The sequential data volume growth remained flat during the quarter at 52,37,000 million MB but much below Reliance Jio’s data volumes of 2,46,00,000 million MB. Data usage per 4G subscriber improved marginally by 1.3% q-o-q to 14,195 MB against 14,008 MB in Q3FY22. Jio’s usage per user is at 19,700 MB. Voice volumes declined 3% q-o-q to 452,000 million minutes, and were below Jio’s 12,00,000 million minutes. Voice minutes per subscriber fell to 610 minutes from 620 minutes in Q3FY22. Jio’s voice minutes per subscriber were at 968 during the quarter. Capex spend for the quarter was Rs 1,210 crore versus Rs 1,050 crore in Q3FY22. The total gross debt (excluding lease liabilities and including interest accrued but not due) as of March 31, 2022, stands at Rs 1.98 trillion, higher than Rs 1.90 trillion at the end of the December quarter. This comprises deferred spectrum payment obligations of Rs 1.14 trillion, AGR liability of Rs 65,950 crore that are due to the government and debt from banks and financial institutions of Rs 18,070 crore. Cash & cash equivalents were at Rs 1,460 crore and net debt stood at Rs 1.96 trillion.