Vodafone Idea CEO Akshaya Moondra on Wednesday said it will take some time for the company to reach a point where debt reduction starts happening but the company is looking at improving its performance. “Debt reduction will start happening when our cash Ebitda is more than the financing cost plus the capex,” Moondra said while responding to shareholders’ query during the 29th annual general meeting (AGM) of the company. In the April-June quarter, Vodafone Idea’s Ebitda was at Rs 4,205 crore, while its finance cost was at Rs 5,262 crore. The capex for the quarter was at Rs 760 crore. The company’s net loss for the quarter narrowed to Rs 6,432 crore from Rs 7,674 crore in the preceding quarter, owing to the fall in expenses, especially the finance costs due to one off adjustments. Revenues from operations fell nearly 1% q-o-q to Rs 10,508 crore. “Based on the support from the government, we have a moratorium where, while there is a large debt, there is a moratorium on cashflow. From cashflow perspective, we are well placed today,” Moondra added. At the end of the April-June quarter, Vodafone Idea's gross debt (excluding lease liabilities and including interest accrued but not due) was at Rs 2.09 trillion. The gross debt comprises deferred spectrum payment obligations of Rs 1.39 trillion, AGR liabilities of Rs 70,320 crore that are due to the government, debt from banks and financial institutions of Rs 4,650 crore and optionally convertible debentures amounting to Rs 160 crore. At the AGM, many individual shareholders expressed concern around continuous loss of subscribers and asked the management about the company’s path to profitability, capex plans, and plans on debt reduction, among others. On the continuous subscriber loss, Moondra said, “it is right that we continue to lose subscribers but that is largely because of lack of investments over the last three years or so. Today, if we look at our share of new acquisitions in the market, that is higher at 24-25% compared to our market share of about 18%". The company said because of lack of 4G coverage it continues to lose subscribers and it is planning to address the same. Vodafone Idea lost 2.5 million mobile subscribers, taking its user base to 210.1 million at the end of June. The blended churn of subscribers rose to 4% from 3.9% in the January-March period. The telecom operator, which has recently raised Rs 18,000 crore via follow-on public offering, is planning to incur a capital expenditure of Rs 50,000-55,000 crore over the next three years, on the back of recent equity fundraise and proposed bank funding. The company will utilise the capex towards expanding 4G coverage in 17 priority circles, 5G launch in key geographies, capacity expansion to meet increasing data demand, and for growing its enterprise business.
