Jio’s rival, Vodafone Idea Ltd. recorded a 5.4 percent decline in its Q1 revenue as reported on Thursday. According to the experts, the coronavirus outbreak followed by nationwide lockdown in different phases is the main reason for this downfall. The pandemic hurt the telecom company’s operational activity as a result of which it lost subscribers
Vodafone Idea Ltd. is a joint-venture between Idea Cellular and Vodafone Group. The company stands to be the third-largest telecom operator in India. Vodafone is Britain’s company while Idea Cellular is led by billionaire Kumar Mangalam. Not only the pandemic but also the government’s order to pay overdue levies and interest pushed the venture in negative territory.
In 2019, the Supreme Court ordered Indian telecom companies to pay Rs. 920 billion in overdue levies and interest to the government. As a result of which Vodafone Idea Ltd. kept aside Rs. 194.41 billion to pay the due. Thus, reporting a larger quarterly loss. Commenting on the Q1 result, Ravinder Takkar MD & CEO of Vodafone Idea Ltd. said “a challenging quarter as availability of recharges due to store closures and ability of customers to recharge on account of the economic slowdown were impacted.”
The subscriber base of Vodafone Idea Ltd. fell to 279.8 million subscribers in the first quarter as against 291.1 million users recorded in the fourth quarter. At the same time, the average revenue per subscriber dropped to Rs. 114 when compared to Rs. 121 during the sequentially last quarter.
The third-largest telecom company in terms of subscribers recorded its eighth consecutive quarterly loss of Rs. 254.6 billion ( Rs.25,460 Cr). However, during the same quarter last year, the company had reported a total loss of Rs. 48.74 billion in its revenue collection. Thus, the consolidated revenue fell to Rs. 106.59 billion against Rs. 112.70 billion last year.
Meanwhile, an interesting trend can be observed in the share market as Vodafone Idea Ltd. is one of the biggest money losers but still, it is attracting investors.