Vodafone Idea adds users after 5 years

New Delhi: Loss-making telecom operator Vodafone Idea added subscribers after a gap of almost five years, data released by the Telecom Regulatory Authority of India (Trai) showed on Wednesday. mint analysis of subscriber data before the editor.

Trai data showed that in February, the company added a net 21,927 users, taking the number of users to 198.4 million. Subscriber data includes both mobile users and machine-to-machine (M2M) connections, which are SIM cards used in devices such as smart meters and internet of things (IoT) devices.

The marginal improvement can be attributed to the telecom operator’s network expansion for both 4G and 5G networks.

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After prolonged subscriber losses, modest user additions signal a potential turnaround for the struggling telecom operator. The gain reflects recent network expansion and government assistance in AGR dues and offers hope for improving service quality, cash flows and halting the protracted decline in the telecom market.

But its return also depends on potential fundraising. The company also has huge spectrum dues.

Vodafone Idea has lost approximately 85 million subscribers in the last five years. Accordingly According to Trai data, the company last added mobile users in March 2021, when its subscriber base was 283.7 million. According to Trai data, Reliance Jio net added 1.6 million users during the month to reach 493.1 million, while Airtel net added 4.8 million users to reach 472.6 million.

BSNL subscriber base stood at 92.9 million in February with a loss of over 1 lakh subscribers. Data showed that the total number of wireless (mobile) connections, including M2M cellular mobile users, was 1.25 billion as of the end of February.

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“The AGR (adjusted gross revenue) overhang meant that financing was not available. Without financing, investments and deployments suffered. This negatively impacted the network experience, impacted brand perception and led to subscriber churn,” Vodafone Idea CEO Abhjit Kishore said during an analyst call in January.

Kishore said the AGR issue is now behind us and the government’s recent assistance is a definitive and long-term solution that gives clear visibility to the company’s cash flows. He added that the company will recover from negative customer additions in the near future.

The cabinet decided to freeze the company’s assets on December 31. ₹87,695 AGR dues as of the end of December. After the freeze, the telco’s total spend on AGR payments over the next six years from March 2026 to March 2031 will be: ₹744 crore, maximum ₹124 crore per year. You will also have to pay ₹100 crore per annum for four years from March 2032 to March 2035.

The government had approved a payment plan for the company to clear frozen AGR dues during FY 32-41.

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Similarly, the AGR recalculation exercise The Department of Telecommunications (DoT) is also currently underway.

Vodafone Idea expected to incur capital expenditure in next three years ₹45,000 crore. Telecom operator seeks raise to support capex plan ₹25,000 crore in bank financing and ₹10,000 crore in unfunded facilities.

According to the company’s October-December quarter report, 4G population coverage, which was 77% in March 2024, increased to 85.5% as of the end of December. In the 1.5 years until December, the company spent approx. ₹18,000 crore to develop 4G network and roll out 5G.

Company’s average revenue per user (Arpu) ₹172 per month as of end-December. In comparison, Jio’s Arpu ₹213.70 while Bharti Airtel’s ₹259.