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Telecom operator Vodafone Idea Ltd is facing a series of tough challenges, with declining subscriber base being its main concern. In the December quarter (3QFY24), the service provider saw its subscriber decline widen to 4.6 million from 1.6 million in the previous quarter, with 215.2 million subscribers at the end of December. Ta. Additionally, data usage per customer decreased sequentially in the third quarter.
Telecom operator Vodafone Idea Ltd is facing a series of tough challenges, with declining subscriber base being its main concern. In the December quarter (3QFY24), the service provider saw its subscriber decline widen to 4.6 million from 1.6 million in the previous quarter, with 215.2 million subscribers at the end of December. Ta. Additionally, data usage per customer decreased sequentially in the third quarter.
This indicates that some of Vodafone Idea’s high usage (read quality) subscribers may be ported over, perhaps to take advantage of Bharti Airtel and Reliance Jio’s 5G networks. says a January 30 report from Axis Capital.
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This indicates that some of Vodafone Idea’s high usage (read quality) subscribers may be ported over, perhaps to take advantage of Bharti Airtel and Reliance Jio’s 5G networks. says a January 30 report from Axis Capital.
Clearly, the company needs to invest in its network infrastructure to limit subscriber losses. However, high debt levels complicate matters. At the end of December, Vodafone Idea’s net debt was huge. INRIt rose nearly 1% from the end of September to $2.1 trillion.about INRDebt repayments of 540 billion yen are scheduled over next year, and third quarter EBITDA (before India AS116) will be approximately 5 billion yen on an annualized basis. INRThe $860 billion company’s financial situation is precarious. Ebitda is earnings before interest, taxes, depreciation, and amortization.
“Despite high operating leverage opportunities from Arpu (average revenue per user) growth sources, significant cash is required for debt repayments,” analysts at Motilal Oswal Financial Services said in a note on Monday. Therefore, there is limited upside room for stockholders.” January.
That means it’s time for Vodafone Idea to raise money. In fact, the capital expenditures (Capex) needed to expand 4G coverage and launch 5G services are dependent on financing. Capital investment levels are currently lower and spending is as follows: INRThird quarter revenue was $330 million, down approximately 37% sequentially. Once the funding is raised, the company expects to deploy 5G in six to seven months.
Meanwhile, peers Reliance Jio and Bharti Airtel have already rolled out 5G. Delays in 5G capital investment by Vodafone Idea could have a negative impact on its already dwindling subscriber base.
A bright spot amidst this gloom is that Vodafone Idea’s Arpu has been steadily growing, helped by changes in entry-level plans and subscriber upgrades. Q3, Alp is INR145, up 2% QoQ, while Jio’s Arpu growth was flat. The transition from 2G to 4G will continue to drive growth for Vodafone Idea’s Arpu. However, in the current climate where competition is increasing and the company continues to lose market share, raising funds is essential to restore damaged investor sentiment.
The company’s stock is down 22% from its 52-week high. INRIn early January, 18.40 fish were seen each. Besides financing, tariff hikes could also be an important trigger for stock prices.
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