Vodafone India Q1 2017 Service Revenue Plunges by 8.7%

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Vodafone India's service revenue declined by 8.7% year-on-year at 1,385 million euros in the quarter ended 30 June 2017 from 1,510 million euros for the same quarter last year. The company said that its organic service revenue declined 13.9% as a result of continued price competition from the new entrant and incumbents.

Vodafone-Idea-Cellular-merger

Despite a year-on-year decline, sequential quarterly trends are stabilising as SIM consolidation is beginning to improve ARPU in the low-value segment, helping offset pricing pressure in the mid and high-value segments of the base, the telco said.

During the quarter, Vodafone India grew its mobile customer base by 2.9 million, while continuing to retain high-value customers. "We ended the quarter with a closing customer base of 211.9 million. Our focused investment strategy delivered a further improvement in our revenue market share in our leadership circles, based on regulatory disclosures for the prior quarter," the telco said.

During the quarter, Vodafone India added 3.4 million 3G/4G customers during the quarter and average data usage has more than doubled year-on-year to 1.1GB per month, as an intensely competitive environment led to a very substantial increase in data allowances.

Vodafone India's data browsing revenue declined 20.4% reflecting further ARPU dilution from lower unitary prices, which declined 67% year-on-year. "This did, however, stimulate a 78% year-on-year growth in monthly data usage per customer to 1.1GB (Q4: 0.6GB)," Vodafone said.

Vittorio Colao, Group Chief Executive, commented: “We have made a good start to the year in Europe, where our commercial momentum remains robust, and growh accelerated across AMAP. Although competition in India remains intense, service revenues stabilised compared with the prior quarter. Our substantial investments in network leadership, an excellent customer experience and even greater more-for-more’ propositions for customers are enabling us to monetise strong demand for mobile data."

The telco said that its active data customer base in India grew for the second quarter in a row, increasing to 69.2 million, with the number of 3G/4G customers rising by 3.4 million to 41.1 million. Voice revenue declined 14.2% as the benefit of higher incoming revenue, and a larger customer base was offset by a 32% year-on-year decline in voice prices as the market moved to unlimited voice tariffs.

On 20 March 2017, Vodafone announced an agreement to combine its subsidiary, Vodafone India (excluding its 42% stake in Indus Towers), with Idea Cellular. The transaction is subject to regulatory approvals and is expected to close during the calendar year 2018.

The combined company will be jointly controlled by Vodafone and the Aditya Birla Group.

"Vodafone India has been classified as discontinued operations for Group reporting purposes. From an operational perspective, the Group remains highly focused on the management of the business and committed to its success, both before the completion of the merger and thereafter," Vodafone Group said in a statement.

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