After a board meeting on Friday, Vi has posted its Q2FY22 Results. After Reliance Jio and Bharti Airtel posted solid performances, Vodafone Idea Q2 Results also reflect a good performance, with recovery on the horizon.
Vodafone Idea Q2 Results: Gradual Improvements
The telco reported Rs. 94,069 crore in gross revenue over the quarter, registering a growth of 2.8% QoQ. Along with this, the telco managed to also improve its EBITDA to Rs. 38,629 crore for the quarter, going up by 4.2% QoQ. Most importantly, Vi also managed to raise its ARPU to Rs. 109, from Rs. 104 in the previous quarter.
According to the telco, "this quarter we had taken certain pricing initiatives to improve ARPU, in line with our stated strategy. We increased the entry-level prepaid pricing plan from Rs. 49 to Rs. 79, in a phased manner, as well as increased the tariffs in some postpaid plans". For context, Airtel's ARPU stands at Rs. 153, while Jio's at Rs. 146. Therefore, in all the key metrics, Vodafone Idea Q2 results paint a green picture.
The telco managed to have a cash holding of Rs. 2,500 crore during the quarter, almost triple the last quarter's Rs. 920 crore. Vi also managed to invest more Capex; spending Rs. 1,300 crore in Q2, as compared to Rs. 940 crore in Q1. However, the telco's debt still stands at Rs. 1.945 trillion, hanging precariously as it owes over half of it to the government.
Vodafone Idea has been conducting "cost optimization", which has seen the telco reduce its opex drastically. For example, the telco reported that, for the second quarter, it has achieved around 80% annualized savings against a target of Rs. 40,000 crore.
While announcing the result, Vi CEO Ravinder Takkar said, ". During the last quarter, we witnessed a recovery in our operating momentum as the economy has started to gradually open up aided by the ongoing rapid vaccination drive".
He also welcomed the telecom relief package, announced towards the end of the quarter. "We welcome the Government’s landmark reform package which addresses several industry concerns and provides immediate relief to the financial stress in the sector", Takkar said.
Churn Reducing, 4G Users Increasing
On the telecom side of things, Vodafone Idea registered a loss of 2.4 million users over the quarter. However, it reported 3.3 million new 4G users, taking its 4G user base to 116.2 million. This fares well for the telco; 4G users have the highest ARPU contribution among all users, and a larger number of 4G users will only better its financial situation.
Most importantly, the telco's subscriber churn reduced significantly; it stood at 3.5% during Q1 and has come down to 2.9%. However, most of this reduced churn can be attributed to Jio losing 11 million subscribers over the quarter, and Airtel absorbing most of them.
Moreover, the telco also reported an average data usage of 14.5 GB/month. For comparison, Jio's average data usage stands at 17.6 GB/month, while Airtel leads the chart at 18.6 GB/month. However, Vi has reason to be positive; it has registered a 27% growth in data usage year-on-year, the best among the three telcos.
Along with this, Vodafone Idea also reported having the fastest data network, citing Ookla, and the best voice call quality, citing TRAI.
Vi CEO Ravinder Takkar said, "We continue to improve our 4G subscriber base on the back of superior data and voice experience on Vi GIGAnet, India’s fastest mobile network, which is testified through consistent top rankings in Ookla and TRAI. We continue to focus on executing our strategy to improve our competitive position and win in the marketplace".
5G Trials and Vodafone Idea
The telco had recently set a record when it achieved 3.7 Gbps speed over its 5G network. However, it has only gone on and almost tripled that. Shortly thereafter, Vi claimed to have hit a top speed of 9.85 Gbps on its 5G network. For context, Jio and Airtel are yet to break the 2 Gbps barrier, and Vi’s top speed outstrips those two by almost a factor of 10. The telco achieved this at its trial network in Gandhinagar, Gujarat, with Nokia.
Last month, Vi partnered with L&T to test 5G-based Smart City solutions. Under the partnership, the companies will create 5G use cases related to IoT and AI, using L&T’s Smart City platform – Fusion. The companies will run the pilot project in Pune, where Vi is running its 5G trials.
The third-largest telco also had recently announced a partnership with Athonet, to test and validate Industry 4.0 use cases with 5G. The partnership with Athonet includes a demonstration of enterprise use cases on 5G in areas like smart construction, smart warehouse, smart agriculture, and smart workplace.
Along with Athonet, Vi has announced partnerships with Vizzbee Robotics Solution and Tweek Labs, the two winners of the 5G Hackathon organized by IMC 2020 and DoT. The telco, along with the startups, will test out Aerial Traffic Management and Motion Capture System based on 5G, on its 5G trials network.