Vodafone Idea Q1 FY21 revenue down 9.3% QoQ

Vodafone Idea revenue for Q1 FY21 was Rs. 10,600 crore, a decline of 9.3% QoQ on account of large scale lockdown and disruption of economic activities.

On Reported basis, EBITDA for the quarter declined to Rs. 4,100 crore, a QoQ decline of 6.4%. Despite a sharp revenue decline, EBITDA excluding IndAS 116 impact declined by Rs. 180 crore to Rs. 1,540 crore, after adjusting for one-off of Rs. 300 crore, vs Rs. 1,710 crore in Q4FY20 as impact of lower revenue was largely offset by reduction in subscriber acquisition costs due to lower gross additions during the quarter, marketing costs and other expenses as well as other cost optimisation initiatives.

Talking about Q1 FY21 performance, Ravinder Takkar, MD & CEO, Vodafone Idea said, “Q1FY21 was a challenging quarter as availability of recharges due to store closure and ability of customers to recharge on account of economic slowdown were impacted. 4G coverage and capacity expansion remains a priority for us to further improve our customers’ experience and we continue to lead the league tables on 4G data download speeds across several states, metros and large cities. We continued to make progress on our strategy with integration largely complete, enabling us to realise cost synergies well ahead of our initial targets.”

Subscriber churn reduced to an all time low of 2% (3.3% in Q4FY20), as net disconnections were lower during the quarter. However, the gross additions were severely impacted by closure of retail stores during the nationwide lockdown resulting in subscriber base decline to 279.8 million in Q1FY21 from 291.1 million in Q4FY20. ARPU for Q1FY21 was Rs. 114 vs Rs. 121 in Q4FY20.

In Q1, the company has added around 13,000 4G FDD sites primarily through refarming of 2G/3G spectrum to expand our 4G capacity. The company’s 4G population coverage is now around 1 billion compared to 916 million a year ago. The company has made progress in implementing LTE 900 in select locations, including through dynamic spectrum refarming, to improve customer experience.

The company has deployed around 59,800 TDD sites in addition to deployment of 12,100 Massive MIMO sites and 11,700 small cells till date. Our overall broadband site count stood at 446,131 as of Q1FY21 compared to 436,006 in Q4FY20.

At the end of the quarter, the 4G subscriber base was 104.6 million. Total data volumes grew by 10.6% (40.4% YoY), to 4,523 billion MB compared to the last quarter, being the highest growth in the last 6 quarters. Total minutes on the network declined by 6% during the quarter.

Gross debt (excluding lease liabilities) as of June 30, 2020 was Rs. 1,189.4 billion, including deferred spectrum payment obligations due to the Government of Rs. 922.7 billion. Cash & cash equivalents were Rs. 34.5 billion and net debt stood at Rs. 1,155.0 billion (vs Rs. 1,125.2 billion in Q4FY20).

Capex spend in Q1FY21 of Rs. 600 crore was lower compared to Rs. 1,820 crore in Q4FY20, as the rollout in Q1 was impacted by COVID-19 with disruptions to equipment supply and logistics following the nationwide lockdown.

The integration of erstwhile Vodafone India and Idea Cellular is now nearly complete, with Vodafone Idea realizing its targeted annualized opex synergies of Rs. 8,400 crore well ahead of the original timeline. Having successfully achieved these synergies, the company has rolled out a further cost optimisation plan.

The merger of Indus Towers and Bharti Infratel has received FDI approval. The long stop date on the original agreement has been extended to August 31, 2020 and the company has an option to monetise our 11.15% stake in Indus on completion of the Indus-Infratel merger.

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