There is a silver lining in Vodafone Idea’s dark numbers

• Vodafone Idea reported an increase in its losses and decline in revenue in the December quarter.
• A decline in the average revenue per user and the subscriber base are two factors behind the telco’s continued struggles.
• However, there’s still a ray of hope or two for the telco’s investors.

Vodafone Idea’s shares fell by nearly 4% in early trade today (January 24) after the troubled telco reported ballooning losses and declining subscriber numbers.

However, the company has shown a sharp improvement in the average revenue per user in the last three months, thanks to tariff hikes.

As of 3:30 p.m., Vodafone Idea’s shares were down by over 7.5%, extending its fall in the past one month to over 18.5%.


Vodafone Idea’s quarter in numbers

Particulars	Dec-21	Dec-20
Revenue	₹9,717 crore	₹10,894 crore
Net loss	₹7,231 crore	₹4,532 crore
ARPU	₹115	₹121
Subscribers	24.72 crore	26.98 crore

Source: Company reports

The decline in the average revenue per user (ARPU) combined with a steep decline in the subscriber numbers resulted in a 11% fall in the company’s revenue as well.

Looking at the bright side

With that said, there’s a ray of hope for the telco – there’s a declining trend in Vodafone Idea’s subscriber losses. According to the telecom regulator’s (TRAI) subscriber data, Vodafone Idea lost over 5.6 million subscribers in October and November 2020. This is down to under 3 million in the same period in 2021. TRAI is yet to release data for December 2021.

During an investor call, the company's managing director Ravinder Takkar said that the drop in subscribers was due to the tariff hike in November and SIM consolidation. Takkar reportedly said that there is "no concern regarding the 4G customer addition pace and the drop in subscribers."

On a year-on-year basis, Vodafone Idea’s ARPU also declined from ₹121 to ₹115. However, a change in the interconnect usage charges (IUC) regime is a factor at play here.

On a sequential basis, though, the company’s ARPU improved notably by over 5% to ₹115 from ₹107 in the September quarter. It is worth noting that the IUC regime was not present in both these quarters, which makes the numbers comparable.

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