Vi Q1 net loss widens to Rs 7295.7 cr, ARPU rises to Rs128

Highlights for the Quarter

• Revenue grew to Rs. 104.1 billion, a QoQ growth of 1.7% (YoY growth of 13.7%)
• ARPU for the quarter stands at Rs. 128 vs Rs. 104 in Q1FY22, up 23.4% YoY aided by tariff hikes
• EBITDA (pre IndAS116) improved to Rs. 21.1 billion, vs Rs. 19.7 billion in Q4FY22 (adjusted for one-offs)
• Continued network capacity expansion supported by spectrum refarming and network upgrade to 4G
• Vi GIGAnet is the fastest 4G network in India as per Opensignal’s April 2022 India Mobile Network
  Experience report*
• Vi continued to offer best voice quality as per TRAI “MyCall” app data for 17 out of 20 months between
  November 2020 and June 2022
• Acquired 5G spectrum (Mid band – 3300 MHz) in our 17 priority circles, along with mmWave in 16 circles
  and 4G spectrum in 3 circles, in the recently concluded spectrum auction
• With incremental preferential contribution of ~Rs. 4.4 billion by Vodafone Group, Promoters infused ~Rs.
  49.4 billion between March 2022 and July 2022

Ravinder Takkar, MD & CEO, Vodafone Idea Limited, said “We are pleased to announce fourth consecutive quarter of revenue growth. We continue to witness 4G subscriber growth on the back of superior data and voice experience offered by Vi GIGAnet as well as due to our focus on creating differentiated digital experience for our customers. In the recently concluded spectrum auction, we have acquired sufficient spectrum in our key markets to offer superior 5G experience to our customers. We also completed the first tranche of fund raising in the form of preferential equity contribution of ~Rs. 49.4 billion from our promoters, including the incremental infusion of ~Rs. 4.4 billion by Vodafone Group in July 2022. We continue to remain engaged with lenders and investors for further fund raising.”

Financial highlights
Revenue for the quarter stands at Rs. 104.1 billion, a QoQ improvement of 1.7%. On a YoY basis, revenue growth was strong at 13.7%, highest since merger. EBITDA for the quarter was Rs. 43.3 billion. EBITDAexcluding IndAS 116 impact improved to Rs. 21.1 billion, compared to Rs. 19.7 billion in Q4FY22 (adjusting for one-off of Rs. 1.5 billion) driven primarily by higher revenue. Capex spend for Q1FY23 was Rs. 8.4 billion vs Rs. 12.1 billion in Q4FY22. The total gross debt (excluding lease liabilities and including interest accrued but not due) as of June 30, 2022 stands at Rs. 1,990.8 billion, comprising of deferred spectrum payment obligations of Rs. 1,166.0 billion and AGR liability of Rs. 672.7 billion that are due to the Government, and debt from banks and financial institutions of Rs. 152.0 billion. Cash & cash equivalents were Rs. 8.6 billion and net debt stood at Rs. 1,982.2 billion.

Operational highlights
We continue to focus on expanding our 4G coverage and capacity. During the quarter, we added 4G FDD sites primarily through refarming of 2G/3G spectrum to expand our 4G coverage and capacity as well as continued to upgrade our core and transmission network. Our overall broadband site count stood at 454,727 as of June 30, 2022. We have shut down ~3,100 3G sites during the quarter while we added over 2,600 4G sites. Till date, we have deployed nearly 71,900 TDD sites in addition to the deployment of ~13,800 Massive MIMO sites and ~13,300 small cells. Further, we continue to expand our LTE 900 presence in 12 circles at multiple locations, including through dynamic spectrum refarming, to improve customer experience. Our 4G network covers over 1 billion Indians as of June 30, 2022 (4G coverage is the population reached/covered by VIL with its 4G network).

These network investment initiatives continue to deliver a significant capacity uplift with our data capacity now ~2.9x compared to September 2018. Our relentless pursuit to have a superior 4G network in the country, through integration and incremental network investments post-merger, are clearly visible through our top rankings on 4G download speeds in independent external reports. We are the fastest 4G network in India as per Opensignal’s April 2022 India Mobile Network Experience report*. We also have the highest rated voice quality in the country as per TRAI’s “MyCall” app data for 17 out of 20 months between November 2020 and June 2022. Our unified brand “Vi”, thus continues to garner strong awareness across all customer segments in the country. ARPU improved to Rs. 128, up 3.6% QoQ vs Rs. 124 in Q4FY22. On a YoY basis, ARPU witnessed strong growth of 23.4% aided by tariff hikes. The subscriber base declined to 240.4 million vs 243.8 million in Q4FY22. However, the 4G subscriber base continued to grow and with 1.0 million customers added in Q1, 4G base now stands at 119.0 million. Subscriber churn was marginally higher at 3.5% vs 3.4% in Q4FY22. We continue to see high data usage per 4G customer at ~14.3 GB/month with the total data traffic witnessing healthy sequential growth of 3.6%.

Auction update
We actively participated in the spectrum auction to strengthen our pan-India 4G footprint and embark on our 5G roll-out journey in the country, in line with our long term vision. We have successfully acquired mid band 5G spectrum (3300 MHz band) in our 17 priority circles and mmWave 5G spectrum (26 GHz band) in 16 circles, which will enable us to offer superior 5G experience to our customers as well as strengthen our enterprise offerings and provide new opportunities for business growth in the emerging 5G era. We will continue to collaborate with enterprise customers and partners in prioritising and developing 5G use cases for real-world deployments. We have also acquired additional 4G spectrum in 3 circles of Andhra Pradesh, Karnataka and Punjab. The total commitment for the spectrum acquired in this auction is Rs. 188.0 billion, with annual instalment of Rs. 16.8 billion. We believe that the above spectrum acquisition will enable us to strengthen our position in our key markets and it aligns well with our long term strategic intent. With this, we now have a solid portfolio of spectrum across all bands in all our priority circles.

Preferential allotment
On July 25, 2022, the Capital Raising Committee of the Board of Directors considered and approved the allotment of ~427.7 million warrantsto Vodafone Group on a preferential basis for the aggregate consideration of Rs. 4.4 billion, in cash with face value of Rs. 10.20 per warrant, with a right to the warrant holder to apply for and be allotted 1 (one) Equity Share of face value of Rs. 10 each at a premium of Rs. 0.20 for each warrant. This coupled with the preferential raise of Rs. 45 billion in March 2022, takesthe total fund infusion by the promoter groups to ~Rs. 49.4 billion between March 2022 and July 2022.

CT Bureau