Vodafone India Reports Revenue Drop of 23.1% During Q3, Blames Aggressive Tariffs and IUC Cut

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Vodafone India today reported a service revenue drop of 23.1% which dubs to Rs 8110 crore for the quarter ended on December 31, 2017, as compared to the same period in 2016. In the global results announcements, Vodafone said that the reduction in IUC (Interconnection Usage Charges) and the intense price competition is to be blamed for the service revenue loss. Vodafone saw a dip of close to 6% QoQ.

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Speaking of Vodafone's Indian unit, the company said that Prepaid ARPU also remained under pressure, declining by 28% QoQ. The reduction in ARPU explains the increased customer adoption of unlimited packages. "This reflects increased customer adoption of unlimited packages, the continued drag from longer tariff validity periods (which extend the timeframe before subscribers top-up), and regulatory pressure," said Vodafone in the statement.

On the brighter side, Vodafone India managed to increase the overall customer base by 5.1 million as compared to 4.5 million in Q2. The overall subscriber base as of December 31, 2017, is 212.5 million. Vodafone also stated that the active data customer base grew by 2.2 million in the quarter to 69.9 million, which is supported by strong growth in mobile broadband subscribers of 6.5 million.

Vodafone India also added 19,300 data sites during the quarter as part of the network expansion. "We maintained our local currency adjusted EBITDA margin at 20.1% in Q3, reflecting tight cost control, and we continued to invest in network expansion, adding 19,300 data sites during the quarter," said Vodafone.

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Considering the global performance, Vodafone said that it would be able to meet the guidelines for the full year. Additionally, Vodafone quoted that Indian data traffic increased fivefold, following a steep decline in data prices. Data usage, Vodafone customers in India are consuming a whopping 2.8GB per month.

Even though posting less revenue than last year and quarter, Vodafone is confident that they are making good progress in the country. And a part of this good progress is it managed to secure all the necessary regulatory approvals for the merger with Idea Cellular. Vodafone also stated that the merger is expected to complete during the first half of calendar 2018.

Back in March 2017, Vodafone announced an agreement to combine its operations with Idea Cellular. The combined company will be jointly controlled by Vodafone and the Aditya Birla Group.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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