Why Vodafone Idea shares lost over 25% of its value on Monday

Mumbai: Shares of Vodafone Idea Ltd slumped 26% to below Rs7 per share on Monday, after the company reported weak performance for the June quarter. The 4% sequential fall in revenues came as a big negative surprise, as analysts were expecting flat revenues compared to the March quarter.

Introduction of minimum recharge plans for pre-paid customers was expected to help the company arrest the decline in revenue. But as it turns out, customers are loath to continue with the new recharge cycles. Further, with competition persisting with low tariffs, the reset to lower priced post-paid plans continues, hurting revenues.

It is worrying that the company continues to lose subscribers at a brisk pace. It lost 14 million more subscribers last quarter (from the March quarter), taking the losses n the past year to about 115 million subscribers.