Vodafone India registers 31.3% fall in revenue
26 July 2018
Vodafone Plc yesterday ubveiled the figures for its India operations, which recorded a 31.1 per cent fall in first quarter service revenue at €955 million, compared with €1,385 million posted during the comparable first quarter of previous financial year.
Vodafone India, which is currently the second-largest telecom operator by subscribers in India, was impacted by intense competition and mobile termination rate (MTR) cuts. Its revenue stood at €959 million in 1Q, down from €1,387 million recorded during the comparable year-ago period.
The company attributed the decline to intense price competition between the market leader and the new entrant.
Excluding the impact of MTR cuts, service revenue declined by 9.6 per cent during the reporting quarter. As pre-paid bundle prices remained stable during the three months, the service revenues declined 0.2 per cent, compared with the preceding March quarter.
“In India, where competition remains intense, we have now received conditional approval from the Department of Telecom for the Vodafone-Idea merger, which we aim to close before the end of August, allowing us to unlock substantial synergies,” said Vodafone Group chief executive Vittorio Colao.
On Monday, Vodafone India and Idea Cellular paid the Department of Telecommunications (DoT) dues worth Rs7,248 crore “under protest” and is now awaiting the final nod to create the largest telecom company with about 436 million customers (See: Vodafone Idea pay up Rs7,268-cr dues to clear path for merger
The company’s total customer base declined by 3 million quarter-on-quarter, reflecting the ‘SIM consolidation’ trend across the market, and now totals 219.7 million. The number of data users has continued to increase and the company has now 77 million data users of which 30.9 million are 4G.
Vodafone India continued to retain high-value customers but at lower price levels, with the contract average revenue per user (ARPU) declining 20 per cent and pre-paid average revenue per use by 28 per cent in the quarter.
In March last year, Vodafone India had entered into an agreement to merge with Idea Cellular to create the largest mobile operator in the country. Earlier this month, the companies received Department of Telecommunications’ conditional approval for the merger proposal.
The company said it is also making good progress on merger of Indus Towers into Bharti Infratel, and has received approvals from the Competition Commission of India and SEBI this month, it said.