Vodafone Idea cites COVID behind 4.7% drop in revenue

Indian telecom operator Vodafone Idea (Vi) announced on Saturday a 4.7 percent dip in revenues QoQ, attributing its weak performance to the COVID-19 pandemic, as the operator edges ever closer to bankruptcy.  

The loss in revenue – which amounts to $1.2 billion – is considered as another blow to the company, which is resorting to outside factors as the main reason behind its financial struggles.  

In parallel, Vi also pointed its finger toward the Indian government claiming that it did not provide a “level playing field,” as it cited its $6.1 billion dollar debt to the government. 

This debt is due following a recalculation by the Department of Telecom (DoT) of taxes on the basis of adjusted gross revenue (AGR).   

In its quarterly report, Vi claimed that the drop in revenue was a result of slowed economic activity due to frequent lockdown measures in most of the districts as the Delta variant continues to ravage India.  

“The severe second wave of COVID caused significant disruptions and slowdown in economic activities,” said Vodafone Idea’s chief executive Ravinder Takkar in a statement. 

Earlier last week, media reports highlighted that the operator’s 2G subscribers would its most affected demographic if Vi’s financial situations remains unresolved, which would force it outside of the market.  

Saturday’s announcement has echoed these media reports, as the telco’s subscriber base declined by a whopping 12 million users.  

The company, however, has reiterated its commitment of holding on to its customers in the upcoming phases ahead. “We continue to focus on executing our strategy to keep our customers ahead, and our cost optimization plan remains on track to deliver the targeted savings,” Takkar stressed.  

Vi has acknowledged the need for support during its difficult financial situation, with its former chairman Kumar Mangalam Birla requesting immediate government aid before his resignation for unknown reasons.  

Birla had previously offered to hand over his stake in the company to the government free of charge in a last ditch attempt to keep the telco in operation, a move unwelcomed by many within Vi.  

However, the beleaguered company appears to be searching for reviving alternatives, as Takkar highlighted that Vi is in active discussion with potential investors for fund raising.