vodafone-logo-may08Data revolution has started in India: Vodafone India has reported a total data revenues of Rs 3,175 crore for the financial year ending March 31, 2013 (FY13), registering a 19.9% growth from Rs 2,640 crore data revenues in FY12. The numbers:

– 37.3 million total data customers, up 12.7% from 33.1 million customers last quarter.
– 3.3 million 3G customers, up 0.8 million from 2.5 million 3G customers last quarter.
– 34 million 2G customers, up 3.4 million from 30.6 million 2G customers last quarter.
– Data now contributes to 7% of the company’s total service revenues in FY13.
– Vodafone India claims to have covered 18% of the data population as of March 2013.

Vodafone defines data users as subscribers who have consumed greater than zero KB data on its GPRS or 3G networks.

Data & Messaging revenues: For the quarter ending March 31, 2012, Vodafone saw a total data revenue of £107 million (around Rs 898.5 crore), up 13.8% from £94 million (Rs 788.4 crore) in the previous quarter and up 21.6% from from £88 million (Rs 737.6 crore) in the same quarter last year. The company however mentions a 29% growth in data revenues at constant exchange rates in its earnings presentation.

Vodafone India’s Messaging revenues was £41 million (Rs 343.89 crore) for the quarter, flat sequentially from £41 million (Rs 343.89 crore) in the previous quarter but down 19.6% from £51 million (Rs 428.2 crore) in the same quarter last year. For the year FY13, the messaging revenues were £156 million (Rs 1309.9 crore), down 24.6% from £207 million (Rs 1738.2 crore) in FY12.

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Data Browsing Revenues vs VAS Revenues

Interestingly, Vodafone India has also provided a split between data browsing revenues and other data revenues. The company has reported data browsing revenues of Rs 19.98 billion for FY13, up 50.5% from Rs 13.28 billion in FY12, while other data revenues (which we assume is VAS revenues) is around Rs 11.77 billion for FY13, down 10.8% from 13.19 billion in FY12.

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Financials

Vodafone India’s voice revenues were £848 million (Rs 7,120 crore) for the quarter, up 8% from £785 million (Rs 6,633.4 crore) in the previous quarter and a minor 0.7% growth from £842 million (Rs 7,070.3 crore) in Q4-FY12. For the year FY13, the voice revenues were £3.21 billion (Rs 26,907 crore), a 1.23% dip from £3.25 billion (Rs 27,283.5 crore) revenues in FY12.

The Fixed line revenue saw a 50% increase to £6 million (Rs 50.38 crore), up from £4 million (Rs 33.53 crore) in the previous quarter but same as £6 million (Rs 50.38 crore) in Q4-FY12 while the other service revenues declined by 27.36% to £146 million (Rs 1223.8 crore) from £201 million (Rs 1685.9 crore) in the previous quarter but increased by 33.94% from £109 million (Rs 915.3 crore) in Q4-FY12.

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Operational Highlights

–  Vodafone India has 152.4 million subscribers for the quarter ending March 31, 2013, up from 147.4 million subscribers in January 1, 2013. The active subscriber base is over 95% of its total subscriber base.

– Vodafone India claims to have the highest rural base among all other telcos with a rural subscriber base of 82.2 million as of Q4 2013.

– It also claims to have the largest postpaid base of 8.6 million subscribers as of Q4 2013.

ARPU: Vodafone India’s (blended) ARPU (Average revenue per user) increased quarter on quarter (QoQ) to Rs 194 from Rs 182 in the previous quarter.

ARPM: The Average revenue per minute for Vodafone India stood at 0.44 paisa for Q4-FY13.

PostPaid ARPU vs Prepaid ARPU: Postpaid ARPU declined to Rs 684 QoQ, from Rs 703 in Q3-FY13. Prepaid ARPU increased to Rs 164 QoQ from Rs 153 in Q3-FY13.

Total Sites: Vodafone has a total 115,000 network sites in India.

Net Additions: Net Additions stood at 4.88 million subscribers for the quarter. The average customer growth slowed in Q4, as the subscriber verification regulations continued to impact gross additions, although Vodafone noted that the customer acquisition costs has remained low.

Prepaid Subscribers: Prepaid subscribers currently account for 94.4% of the Vodafone India’s total subscriber base.

Churn: Postpaid churn declined to 18.2%, while prepaid churn declined to 48.7%. Total churn declined to 47%. Note that Vodafone accounts for churn over four consecutive quarters.

– Minutes of Use: increased to 1.55 billion from 1.48 billion in Q3-FY13 and 1.42 billion in Q3-FY12.

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Indian Tax case

Vodafone informed that it has still not received any formal demand for taxation, although it did receive a letter on 3 January 2013 reminding the company of the tax demand raised prior to the Indian Supreme Court judgment and claiming to increase the demand interest to Rs 14,200 crore (£1.6 billion).

The company also noted that a separate case taken against Vodafone International Holdings BV (VIHBV) to treat it as an agent of Hutchison Telecommunications International Limited (HTIL) as well as penalties of up to 100% of the assessed withholding tax for the alleged failure to have withheld tax remains pending, despite a judgement from the Indian Supreme Court.

Vodafone believes that it will be able to make successful claim under the Dutch-India Bilateral Investment Treaty (BIT), should the company receive any further demand for taxation. However it will take several years for the company to recover any deposit required by an Indian court as a condition for any stay of the tax demand pending the outcome of Vodafone’s BIT claim. The company is currently in talks with the Indian government to see if any mechanism exists under the Indian law which will allow both the parties to explore a possibility of resolving this dispute.

Financials

Vodafone India’s total service revenues stood at £1.15 billion (Rs 9,656.6 crore), up from £1.13 billion (Rs 9,478 crore) in the previous quarter and £1.10 billion (Rs 9,236.8 crore) in the same quarter last year. Vodafone noted that the service revenues grew by 10.7% organically for the quarter while the adjusted operating profit grew by 291.1% for the quarter. The company attributed this growth due to a strong growth in mobile voice minutes and data revenue which was partially offset by regulatory changes.

For the fiscal ending March 31, 2013 (FY13), Vodafone India’s total service revenues was Rs 356.1 billion, up 10.6% from Rs 321.8 billion. The company informed that it was negatively impacted by the new consumer protection regulations on charging of access fees and selling integrated tariffs and value added services. The adjusted operating profit for the fiscal was £221 million (Rs 1,855.75 crore), up from £60 million (Rs 503.3 crore) profit in FY12.

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Developments During the Quarter

– Vodafone India officially launched its M-Pesa mobile money transfer and payment service in India with ICICI Bank, after five months of the announcement. The service is being initially offered in Kolkata, West Bengal, Bihar and Jharkhand through over 8300 authorized agents.

– Vodafone India partnered with Mahindra Reva to provide Machine-to-Machine (m2m) communication services for the recently launched electric vehicle,  Mahindra e2o.

–  Vodafone Business Services (VBS), the enterprise arm of Vodafone India, had launched wireline services for businesses in India, thereby entering the wireline segment in the country.

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