India's Vodafone Idea reports improved results

India's Vodafone Idea reports improved results

There’s been good news at last for cash-strapped Indian operator Vodafone Idea as recent results still indicate a net loss – but a slightly less worrying one than the results from the previous quarter.

The financial year fourth quarter results showed a net loss narrowing to Rs 6,544.9 crore (about US$845.7 million) from Rs 7,234.1 crore (US$934.7 million) in the three-month period before that.

It’s a result commentators put down in part to last November’s tariff hikes. The operator’s quarterly revenue reportedly increased 5.4% to Rs 10,239.5 crore (about US$1.3 billion) in the January-March quarter, while ARPU rose to Rs124 (US$1.60) from Rs 115 (US$1.48) in the previous quarter.

India's Economic Times news service suggests that Vodafone idea and the Department of Telecommunications (DoT) agree on the net present value (NPV) of the accrued interest due to the four-year deferral of spectrum and adjusted gross revenue (AGR) payments at Rs 16,133.1 crore, an eye-watering US$2.1 billion.

The government expects to hold around 33% in Vodafone Idea after the conversion of the company’s accrued interest liability on deferred dues into equity. The UK’s Vodafone Group and India’s Aditya Birla Group will collectively hold 50% in the company.

Vodafone Idea is said to be actively engaged with lenders and investors for further fund raising. The company plans to raise another Rs 10,000 crore (a little under US$1.3 billion) via a mix of equity and debt.

As for price hikes, Vodafone Idea is apparently looking to bring ARPU up to Rs 200 ($2.58) in the short term and eventually to Rs 250 ($3.23) in the long term.

Shares of Vodafone Idea rose 3.3 % after the improved results, but, while recent news has been encouraging, there seems to be a long way to go yet.

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