Net loss was 116 billion rupees ($1.5 billion) in the three months ended March, the country’s No. 3 mobile phone carrier said late Tuesday. That compares with the 50 billion rupees net loss average of analyst estimates.
The operator, formed by the merger of Vodafone Group Plc’s local unit with billionaire Kumar Mangalam Birla’s Idea Cellular Ltd., hasn’t reported a profit since the deal was announced in 2017. Birla warned in December that the venture was headed for insolvency in the absence of any government relief with the dues.
Vodafone Idea is fighting for survival as it struggles to raise money to pay dues imposed by a Supreme Court decision in October on how spectrum and other fees are calculated. The surprise ruling came on top of aggressive price competition led by upstart Reliance Jio Infocomm Ltd., which used free voice and cheap data packages to lure more than 300 million users.
“Our ability to continue as going concerned is essentially dependent on a positive outcome of the application before the Hon’ble Supreme Court for the payment in installments and successful negotiations with lenders,” Vodafone Idea said in the statement.
The carrier said in June that the only way for it to stay afloat is by making staggered payments. The Supreme Court has asked telecom operators to file audited balance sheets, income tax returns, and the particulars of fees deposited during the last 10 years.
Vodafone Idea’s net debt stood at 1.13 trillion rupees as of the quarter ended March, compared with about 1 trillion rupees at the end of the fiscal third quarter, the company said in the statement.
Dues related to the ruling amount to 583 billion rupees for Vodafone Idea, the company said, citing the government’s estimate. The carrier, which gave a lower estimate for the total it owes, has paid some against the amount.
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Market Reaction
Vodafone Idea shares have dropped 72% so far this year, including a 4.5% decline Tuesday to 10.6 rupees. The stock dropped to as low as 2.4 rupees in November 2019.
