Vodafone India posted revenues of £ 674 million in the third quarter, up by 37.3 percent from the corresponding quarter last year. The company does not disclose profit.
Revenue growth in India has slowed marginally from last quarter. Despite strong competition and the recession, the operator now has 60.9 million customers in India. It added 2.1 million subscribers during the quarter assisted by its expansion into six new circles. It has added around 10,000 base stations during the quarter in the country. Vodafone India’s share in the mobile phone operator market rose to 18 percent. It will continue to drive increased volumes by introducing promotional offers, the company has noted in its official earnings release.
Vodafone has seen a reduction in churn with subscribers moving towards Lifetime Validity prepaid offerings. Its ARPU has also dropped to Rs 297 from Rs 305 in Q2 while voice usage increased from 56,745 minutes last quarter to 61,606 minutes in Q3.
Prepaid subscribers form 92.1 percent of the operators subscriber base. The company claims its visitor revenue (when subscribers of other operators roam into its network) suffered a negative impact due to the Mumbai attack and poor economic conditions that have reduced travel in the country.
Vodafone’s infrastructure joint venture with Bharti and Idea – Indus Towers – has steadily increased its operations. The independent tower company provides passive network infrastructure to all operators.
Vodafone’s alleged tax evasion case is still in the courts and the next hearing is scheduled for March 3. The cellular operator has been given a $2 billion tax bill by the Supreme Court for not withholding tax when it acquired 67 percent stake in Hutch for $11 billion in 2007. Vodafone has challenged the jurisdiction of Indian tax authorities on the transaction which took place outside the country. Vodafone has been given a right of appeal to the Indian Courts should the tax authorities consider they have such jurisdiction.
Why India is Critical to Vodafone Global
India has played a major role in contributing to Vodafone’s revenue from APAC, which was up 27.9 percent to £ 1402 from the same quarter last year. While India’s revenues grew by 29.6 percent other APAC countries posted far lower growths at 10 percent in Egypt, 7 percent in Australia and 3 percent in New Zealand at constant exchange rates.
Vodafone has recorded a 14.3 percent rise in overall turnover in the third quarter of £10.47 billion, boosted by the beneficial foreign exchange environment.
Without this benefit, service revenue growth would be at 1.4 percent, down from 2.1 percent last quarter. Excluding acquisitions and currency fluctuations, growth would have been down by 1 per cent, had it not been for the inclusion of recently acquired businesses in India, reports Times Online. Vodafone has a total of 289 million customers globally, with 9.5 million new customers added over the quarter. Data business is also steadily growing with the company recording a 25.3 percent organic growth in revenues.
Vodafone may lay off employees as part of its billion pound savings plan. The cost saving plan may have an impact on headcount but the number of jobs to be affected is not known. The company will look at head office, IT and back office costs as sources for its savings, it has said.