(Reuters) - India's Vodafone Idea reported a bigger-than-expected second-quarter loss on Wednesday, weighed down by a shrinking user base.

The telecom operator narrowed its consolidated loss after tax to 71.76 billion rupees ($850.7 million) for the quarter ended Sept. 30, compared to a loss of 87.38 billion rupees a year ago, helped by an increase in tariffs.

However, analysts' on average estimated a loss of 64.57 billion rupees, according to data compiled by LSEG.

Vodafone Idea's user base fell 2.4% sequentially and 6.7% year-on-year to 205 million as of Sept. 30, smaller than Jio's 478.8 million and Airtel's 407 million.

The decline resulted from the subscriber base, including 4G users, switching to cheaper alternatives like state-owned BSNL following price hikes.

All three Indian mobile carriers—Jio, Airtel, and Vodafone Idea—increased their tariffs in June for the first time in over two years, marking a shift in their strategy from aggressive competition for market share towards increasing profitability.

The increase in tariffs helped boost Vodafone Idea's average revenue per user (ARPU), a key performance metric for telecom firms, by 7.8% sequentially and 17% year-on-year to 166 rupees during the quarter.

However, its ARPU lagged behind that of Reliance Industries-owned Jio's 195.1 rupees and Bharti Airtel's 233 rupees for the same period.

Vodafone Idea, formed by a merger between the Indian arm of the UK's Vodafone Group and Aditya Birla Group's Idea Cellular in 2018, has posted a loss every quarter as it loses ground to larger rivals Airtel and Jio.

Vodafone Idea's revenue from operations during the quarter rose about 2% to 109.3 billion rupees, but fell short of analysts' estimates of 112.65 billion rupees.

Airtel and Jio previously reported upbeat quarterly profits led by the price hikes.

($1 = 84.3560 Indian rupees)

(Reporting by Aleef Jahan and Nishit Navin in Bengaluru; Editing by Abinaya Vijayaraghavan)