Vodafone Idea’s Brave Decision Results In 0.1% Revenue Growth In Q4

India’s largest telecom operator Vodafone Idea announced the financial results for the fourth quarter ended 31 March 2019. The company posted 0.1% growth in its revenue during Q4 as compared to the previous quarter.

In Q4, the company that completed its merger process in August 2018, posted revenue of Rs 11,775 crore as against Ra 11,764 crore in Q3, 2019, showing the negligible growth. However, on a broader view, its a pleasant development for the company as the operator had registered decline in revenue for past 11 quarters. In Q3 and Q2 of 2019, the company’s revenue declined by 2.2% and 7.1% respectively.

“We are pleased with the rapid progress we have made to deliver on our stated strategy.The initiatives we have taken since the merger are yielding positive results and we are well on track to deliver our synergy targets two years early. We remain focused on fortifying our position in key profitable districts by expanding coverage and capacity of our 4G network, targeting higher share of new 4G customers by offering an enhanced network experience, whilst also improving cash flows through cost transformation. The oversubscription of our recent rights issue, the largest in India, is a clear testament to investors’ support for our strategy,” said Balesh Sharma, CEO Vodafone Idea limited commenting on the financial results.

In Q4, the firm also narrowed its quarterly loss to Rs 4882 crore as against Rs 5005 crore in the previous quarter.

One of the key factors the company attributed this positive development to is it’s decision to go for ‘service validity vouchers’ it introduced in Q3. The service validity vouchers force a customer to recharge their prepaid phones with a minimum voucher of Rs 35 that gives them 28 days validity.

It was a bold step by the operator as the management knew that this would dispel some customers from its network. And it did. More than 53.2 million customers left its network or switched form multiple SIMs to single SIMs.

“As expected, this resulted in a decline of 53.2 million subscribers as ‘Incoming-only’ or ‘Low ARPU’ customers migrated their spending from multiple SIMs to single SIM, taking the overall subscriber base to 334.1 million,” the company acknowledges.

However, it also brought some good results as the ADR (average daily revenue) of the company increased during the quarter. The ADR showed 2.2% growth during the quarter and subsequently, the firm’s ARPU also grew by 16.3% in Q4 to Rs 104 from Rs 89 in Q3.

As far as other numbers are concerned, by end of Q4 it added 5.4 million 4G customers, taking the overall 4G subscriber base to 80.7 million.  The broadband subscriber base for the quarter was 110.2 million. Total data volumes grew by 9% to 2,947 billion MB compared to the last quarter and the average daily data volume increased by 11.4% (32.7 billion MB in Q4 vs 29.4 billion MB in Q3). Total minutes on the network declined by 1.3% during the quarter, due to reduction in incoming minutes following the disconnection of ‘Incoming only’ or ‘Low ARPU’ customers. The total subscriber base of Vodafone Idea by end of Q4 was 334 million.

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