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Q1 Results: Vodafone Idea—The Only Outlier In The First Quarter

Vodafone Idea Ltd., once India’s largest telecom operator, continues to lose ground amid an intense tariff war as its subscribers switched to other networks and opted for lower rental plans.

Not only that, it’s also the only operator to witness a decline in revenue in the quarter ended June, data compiled by BloombergQuint showed.

Revenue of Bharti Airtel Ltd.’s India mobile operations rose as fewer customers quit the network, data subscribers increased and average revenue per user rose. Reliance Jio Infocomm Ltd.’s revenue rose the most among peers, albeit at a slower rate over previous quarters.

Operating profit of Airtel, Reliance Jio and Vodafone Idea rose in Q1 as they adopted the new Ind AS-116 accounting standard. Adjusted for that, the operators’ earnings before interest, tax, depreciation and amortisation declined over the preceding quarter. The Sunil Mittal-led operator’s operating profit was lower also because of some one-off cost reversals in the base quarter.

Airtel, however, reported higher ARPU than Reliance Jio for the first time since the telecom venture by Asia’s richest man began operations. Airtel’s adjusted average rental in Q1 rose to its highest in seven quarters as more data users and subscribers chose higher-rental plans.

Reliance Jio’s average rental declined as number of JioPhone users rose, subscribers adopted longer-term value packs and increase in digital recharges led to more cashbacks.

Bharti Airtel’s capital expenditure rose in the quarter ended June, while that of peers fell. The decline in Reliance Jio’s capex was mainly because of the demerger of its tower and fibre assets at the end of last financial year.

Net debt of Reliance Jio rose. Vodafone Idea and Airtel reported a decline in debt as they raised funds during Q1 to repay outstanding borrowings. Both operators raised about Rs 25,000 crore each. Still, reduction in debt is lower than the funds raised, indicating the continuous cash burn in the industry.―Bloomberg Quint

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