UPDATE 2-Vodafone Idea posts slight slip in Q2 revenue on subscriber losses

(Adds analyst quote, details)

BENGALURU, Oct 29 (Reuters) - Indian telecom operator Vodafone Idea Ltd reported a marginal fall in second-quarter revenue on Thursday, as subscriber losses to rivals overshadowed benefits from a move to hike tariffs last year.

The company’s subscriber base slipped to 271.8 million subscribers as of September-end from 311.1 million subscribers a year ago, indicating a decline in market share for the joint venture between Vodafone Group and India’s Idea Cellular.

“Vodafone-Idea seems to be struggling to stay relevant in today’s times... (Bharti) Airtel and (Reliance) Jio, have made significant investments in building platform-based services to stay relevant in their customer’s ecosystem,” said Ashutosh Sharma, an analyst at Forrester.

The debt-laden company re-branded itself last month and approved a fundraise of up to 250 billion rupees ($3.38 billion), as it looks for ways to pay about 500 billion rupees in government dues.

Vodafone Idea said it was evaluating various fund raising options.

Vodafone Idea was saddled with gross debt of 1.16 trillion rupees, excluding lease liabilities, as of Sept. 30.

Quarterly average revenue per user (ARPU) at the country’s third-largest telecom operator rose 11.2% to 119 rupees, but was much lower than larger rival Bharti Airtel’s ARPU of 162 rupees.

Vodafone-Idea’s 4G subscriber base stood at 106.1 million for the period, compared with 104.6 million in the first quarter ended June 30.

“Unless Vodafone is able to change its direction... find its niche either in enterprise business or customers, it will continue to lose customers,” Sharma added.

Consolidated revenue fell to 107.91 billion rupees from 108.44 billion rupees a year earlier.

Consolidated loss came in at 72.18 billion rupees for the period ending Sept. 30, compared with a loss of 509.22 billion rupees a year earlier.

Earlier this week, Bharti Airtel reported a 22% jump in second-quarter consolidated revenue, helped by higher tariffs and strong 4G subscriber additions. ($1 = 73.9430 Indian rupees) (Reporting by Philip George in Bengaluru; Editing by Anil D’Silva and Rashmi Aich)