Why are the subscribers of VI continuously decreasing?


Vodafone Idea (Vi) sent a total loss of Rs 7,132 crore in the second half of FY22 as the communications company continues to struggle with high financial costs and loss of subscribers. At the same time last year, it reported a loss of Rs 7,218 crore.

This was the company’s first quarterly result after the government’s transformation package – the livelihoods of a financially pressured firm. Although the company has not disclosed any of the revenue, it has indicated that it is in talks with lenders to facilitate loan repayment.

The company’s total revenue decreased by 12.8 percent annually to Rs 9,406 crore due to a decrease in enrollment.

Consequently, revenue increased by 2.8 percent from Rs 9,152 crore. While operating costs dropped by YoY, they were respectively up 1.8 percent to Rs 5,543 crore.

Profits before interest rates, taxes, depreciation, and inflation (Ebitda) decreased by 6.3 percent on a YoY basis to Rs 3,862 crore in the second quarter. Financial costs increased by 9 percent YoY to Rs 5,082 crore. The average Vi per capita per user (ARPU) has grown respectively to Rs 109 from Rs 104 due to the increase in the price of pre-paid entry-level programs and certain back-end programs.

The company lost 2.4 million subscribers in the second quarter and the customer base stands at 253 million. However, it managed to reduce the loss of subscribers compared to the first quarter, which dropped by 12.4 million customers.

Vi also reported a series of 4G subscribers of 3.3 million to 116.2 million. Although subsequent growth in data usage remains low, it has grown by 27 percent on a YoY basis. Data usage by 4G subscribers stood at 14.5 Gb / month, compared to 11.8 Gb / month last year, the company said.

Ravinder Takkar, managing director and chief executive officer of Vodafone Idea, said: “Over the last quarter, we have seen a steady increase in our operational momentum as the economy begins to slowly open up, aided by an ongoing vaccination program. We continue to improve our 4G subscriber base after high data and voice information on Vi GIGAnet. We continue to focus on implementing our strategy to improve our competitive position and win markets. “On 15 September, the Union Cabinet approved a telecommunications assistance package that included the four-year suspension of AGR and spectrum payments.

It also included reduced bank guarantees and the option to convert interest-bearing interest into equity. Although Vi has decided to use the suspension notice for both AGR and spectrum payments, it should take a call about the option to convert billing into equity within 90 days.

As of the end of September, Vi’s total debt stands at Rs 1.94 trillion. In the first phase of FY22, the company reported a loss of Rs 14,451 crore and its negative value of Rs 52,685 crore.

Airtel, Jio, and Vodafone Idea made their prepaid payments more expensive last month. Vodafone Idea, Airtel, and Jio plans have cost about 25 percent and now Vodafone ideas will cost more.

This was confirmed by Vodafone Idea CEO Ravindra Takkar. A few days ago, Motilal Oswal Financial Services in a report said Vodafone Idea would make its tax plans more expensive, though the company did not make an official statement on the matter at the time.

Ravindra Takkar said the company’s cheap 4G 99 Rs plan is not as expensive as the consumer’s need. He said the company would make its plan more expensive this year as well. Vodafone Idea plans can cost by the end of 2022 or the beginning of 2023. New taxes are expected to increase the company’s per capita income (ARPU) by at least 1.9 times.

The number of subscribers for Vodafone Idea is constantly declining: In the case of subscribers, Vodafone Idea also loses a lot more often. Its users are constantly declining. After the company’s plans became more expensive in December 2021, its subscriber base dropped by about 3 crores. With this, even after the most expensive prices, the average per capita income (ARPU) drops again by 5 percent. The company’s current ARPU for Rs 115 was Rs 121 in the last half of 2020-21.

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