Vodafone Idea talks up integration as losses continue

Vodafone Idea talks up integration as losses continue

Vodafone Idea has sustained a net loss for the third consecutive quarter following its fiscal Q1 for 2020.

Across the quarter, the Indian market leader lost 14.1 million subscribers, with its total dropping to 320 million. Meanwhile, its rival Reliance Jio reported a customer base of 331 million at the end of June, meaning that it will take first place in the market by this measure unless third-placed Bharti Airtel has picked up a substantial number of new subscribers prior to its earnings call on 1st August.

Vodafone Idea was created in August last year following the merger of Vodafone India and Idea Cellular, so no year-on-year comparisons can be drawn but the operator has managed to trim down its losses across each quarter of operation.

At the end of June, it recorded an INR48.7 billion ($708 million) loss as compared to INR48.8 billion in Q4 and INR50 billion in Q3. However, it also saw reduced revenue in its most recent quarter, recording INR113 billion as opposed to INR117.7 billion in the two preceding quarters.

The operator ascribed the losses to increase churn and “continued down trading of high ARPU customers”. However, it had more positive news regarding the continuing process of combining the assets of Vodafone India and Idea Cellular; the cost synergies of this integration are projected to save the operator INR84 billion in annual opex by the end of June 2020, in line with Vodafone Idea’s targets.

The improved efficiencies should also deliver wider coverage and higher capacity for customers, with Vodafone Idea stating: “We believe the improved data speeds will lead to superior customer experience and perception, which should benefit our subscriber additions over time.”

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