Vodafone-Idea Q1 FY22 Results: Suffers Loss Of Rs. 7,312.9 Crores, ARPU Also Declines

The slowdown in economic activities due to COVID-19 restrictions has affected the performance of Vodafone-Idea in Q1 of this financial year. The telecom operator has reported a loss of Rs. 7,312.9 crores in Q1, which is higher than the previous quarter as it was Rs. 6,985.1 crores.

Besides, the company said that its financial situation is impacting its procedure to raise money. Notably, the company is under huge pressure to clear all dues.

"The company's financial performance has impacted its ability to generate the cash flow that it needs to settle/ refinance its liabilities and guarantees as they fall due, which along with its financial condition, is resulting in material uncertainty that casts significant doubt on the company's ability to make the payments mentioned therein and continue as a going concern," Vi said.

In addition, the ARPU of the company has declined to Rs. 104 in Q1 as against Rs. 114 during the same quarter last year. This development comes soon after Vodafone- Idea filed a petition in the Supreme Court for recalculation of adjusted gross revenue dues.

Vodafone-Idea Situation In India: Check Here For All Details

Meanwhile, industry analysts believe that if telecom operators need to raise $3.5-5 billion (about Rs 26,000-37,000 crore) to clear all dues like adjusted gross revenue. Besides, the company needs to invest in a 4G network.

"Vi needs around $3.5-5 billion of funding within the next three to six months as it must be able to pump in at least $1.5-2 billion annually towards network capex, even after meeting immediate AGR, and spectrum payment commitments, failing which its customer losses could rapidly accelerate to around 15-20 million a quarter, leading to an inevitable slow death," Nitin Soni, senior director at global rating agency Fitch was quoted by ET.

This clearly shows that telecom operator desperately needs money and support from the Government to operate in India. But still, its financial performance is affecting money-raising plans. However, one should not forget that the Department of Telecommunication is preparing new norms and regulations for the telecom sector, which is expected to help the ailing telecom operator, including Airtel.