Despite recent good news regarding a loan of 20 billion rupees (about US$240 million) to meet payment obligations, Indian operator Vodafone Idea (Vi) has reported widened net losses during the first three months of its financial year to the end of June 2023.
Its net loss has increased to 78.37 billion rupees (US$943 million) from 64.14 billion rupees (US$770 million) quarter-on-quarter and 72.96 billion rupees (US$880 million) in the same period of 2022.
It has also lost 19 million mobile subscribers. It now has around 221.4 million mobile subscribers on its books, compared to 240 million during the same quarter last year.
On a more positive note, Vi has reported that gross revenue grew by 2.4% year-on-year to 106.56 billion rupees (US$1.28 billion). However, operating expenses grew by 6.9% over the same period.
The operator’s total gross debt is in the region of US$26.4 billion, largely due to deferred spectrum payment obligations and adjusted gross revenue dues owed to the government. However, debts to suppliers may be additional to this sum.
The company has continued to record good 4G subscription growth, though it is far behind Reliance Jio and Bharti Airtel on 5G rollout. In fact under the terms of its licence Vi was required to begin offering 5G services by mid-August 2023, but, according to TeleGeography's CommsUpdate, it remains in discussions with "various network vendors" to finalise its 5G rollout strategy.
Vi has told the Department of Telecommunications (DoT) that it will make use of a 30-day grace period to pay the second instalment of dues for its 5G spectrum, totalling 16.8 billion rupees (US$202 million) and due this week.
CommsUpdate points out that If the company fails to clear the dues within the 30-day period, it could face sanctions from the DoT, including the cancellation of the spectrum licence.
The recent loan to meet ‘impending payment obligations’ may help with 5G expenditure. However, an article in India’s Economic Times suggests it won’t be sufficient for clearing past vendor dues or accelerating network spends. Therefore, say analysts interviewed by the paper, Vi needs to conclude its much-delayed fundraise quickly.