Mumbai: In a significant financial leap, Vodafone Idea Limited (Vi) posted its highest quarterly cash EBITDA since its merger, fueled by strategic network expansions and tariff hikes. The quarter ending 30 September 2024, marked a milestone for Vi as it reported a robust quarterly cash EBITDA growth of 10.5 per cent, reaching Rs. 23.2 billion. This record-breaking achievement comes on the heels of a major $3.6 billion network equipment agreement with tech giants Nokia, Ericsson, and Samsung, aimed at accelerating the company’s network capabilities.
Vi’s revenue from operations rose to Rs.109.3 billion for Q2FY25, reflecting a quarter-on-quarter (QoQ) increase of 4 per cent. Notably, customer revenue climbed by 5.6 per cent following tariff adjustments implemented in July, positioning the company to drive further revenue gains in the ensuing quarters.
Amidst these revenue gains, Vi’s EBITDA margin strengthened to 41.6 per cent compared to 40 per cent in the prior quarter. However, challenges persist, with the company reporting a consolidated net loss of Rs. 71.8 billion, widening from the Rs. 64.3 billion recorded in Q1FY25. The increase in interest and financing costs to Rs. 63.1 billion, up from Rs. 52.6 billion last quarter, underscores ongoing financial pressure.
Vi made significant progress in reducing its bank and institutional debt, cutting it by Rs. 45.8 billion over the last year to Rs. 32.5 billion as of September 2024. However, long-term obligations remain substantial, with government dues totaling Rs. 2,122.6 billion. These include deferred spectrum payments of Rs. 1,419.4 billion and an AGR liability of Rs. 703.2 billion.
The highlight of Vi’s strategy this quarter was a rapid enhancement of its 4G infrastructure. Following its recent capital raise, the company expanded its 4G data capacity by 14 per cent and extended 4G coverage to an additional 22 million users. With a subscriber base of 205 million and 125.9 million 4G users, Vi deployed a record-breaking 42,000 new 4G sites during Q2FY25. This includes 20,500 sites upgraded with sub-GHz 900 MHz bands, improving indoor coverage and overall network experience.
The capex allocation for Q2FY25 amounted to Rs. 13.6 billion, a significant increase from Rs. 7.6 billion in Q1FY25. Looking forward, Vi has earmarked an ambitious Rs. 80 billion in capex for the second half of FY25, signaling continued focus on expanding its network footprint and enhancing customer connectivity.
To retain high-value postpaid customers, Vi revamped its RED X Plan with premium benefits, including unlimited data, streaming subscriptions, and complimentary international roaming. This approach appears to be effective, with the postpaid subscriber base seeing both quarterly and annual growth. Average Revenue Per User (ARPU), a key performance metric in telecom, increased by 7.8 per cent QoQ, reaching Rs. 166 from Rs. 154 in Q1FY25.
In the digital space, Vi showcased its commitment to innovative solutions at the Indian Mobile Congress 2024. Vi demonstrated its ‘Future is Live’ initiative, highlighting industry applications of IoT, AI, and ML in areas such as smart mining and remote monitoring. Vi Business further expanded its enterprise offerings by partnering with Genesys and Infinity Labs to introduce advanced cloud-based customer experience and security solutions.
With plans to extend its 4G coverage to 1.2 billion by September 2025 and initiate selective 5G rollouts by Q4FY25, Vi aims to solidify its position as a leading telecom player in India. However, the company’s ability to manage its financial liabilities will be pivotal.
