Vodafone's quarter makes investors sick 😷
The gap between India’s top 2 telcos and the third contender keeps widening — as VI limps along, saddled by its mammoth debt, sub-par spectrum assets, and operating inefficiency. Latest quarterly earnings offer a grim picture.
Quick look:
- Losses of ₹7K crores, a ridiculous 84% higher than what the markets were expecting
- Revenues of ₹9.6K crores, a 12% sequential drop — forgivable in the COVID situation
- ARPU declined to ₹107 from ₹121 last quarter, 15-20% below competition
- Total debt expanded by 60% to ₹1.8 Lakh crore
you can’t possibly compete with that bag on your shoulders, against a much polished balance sheet, and agility of competitors like RIL?
Dalal Street sniffed the junk and beat VI stock into a pulp — down 8.5% by day's end. With unpaid spectrum charges piling up, falling subscribers, declining revenues, and debt costs — management hinted at a desperate need to raise cash to avoid a crash and burn.
What do they say — a couple days ago Sunil Mittal of Airtel said “it’d be tragic” if only two players eventually survive in India’s telco game.
Big picture — leaving a market for just 2 giants to split up between themselves could lead to price increases, service declines, and other anti-trust problems, just as the nation heavily leans on telcos to provide connectivity for our rapid digitization.
