Indian operator Vodafone Idea (Vi) has reported increased net losses for the first three months of its financial year ending in June 2023, despite receiving a loan of 20 billion rupees (about US$240 million) to meet payment obligations. The net loss has risen to 78.37 billion rupees (US$943 million) from 64.14 billion rupees (US$770 million) in the previous quarter and 72.96 billion rupees (US$880 million) in the same period last year.
Additionally, Vi has lost 19 million mobile subscribers, leaving it with approximately 221.4 million subscribers, compared to 240 million in the same quarter of 2022.
On a positive note, Vi has reported a 2.4% year-on-year growth in gross revenue, reaching 106.56 billion rupees (US$1.28 billion). However, operating expenses have increased by 6.9% during the same period. Vi's total gross debt amounts to around US$26.4 billion, primarily due to deferred spectrum payment obligations and adjusted gross revenue dues owed to the government. It is important to note that debts to suppliers may be added to this sum.
While Vi has experienced growth in 4G subscriptions, it lags behind Reliance Jio and Bharti Airtel in terms of 5G rollout. Vi was required to begin offering 5G services by mid-August 2023, according to its license, but it is currently in discussions with various network vendors to finalize its 5G rollout strategy.
Vi has informed the Department of Telecommunications (DoT) that it will utilize a 30-day grace period to pay the second installment of dues for its 5G spectrum, totaling 16.8 billion rupees (US$202 million) and due this week. Failure to clear the dues within this period may result in sanctions from the DoT, including the cancellation of the spectrum license.
Although the recent loan may assist with 5G expenditure, it is unlikely to be sufficient for clearing past vendor dues or accelerating network spending, according to analysts interviewed by India's Economic Times. Therefore, Vi needs to promptly conclude its long-delayed fundraising efforts.
