Vodafone‘s India services revenues for the quarter ended 31st March 2012, was at GBP 1096 million, a growth of 10.93% YoY. Note that Vodafone’s financial report as well as presentation slides mention a 19.5% YoY growth in service revenues, citing organic growth related to performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates. According to the company this growth was on account of increase in the customer base, continued growth in incoming and outgoing voice minutes and a 51.3% growth in data revenue. Revenue from voice services increased quarter on quarter to GBP 842 million.

The effective rate per minute remained stable compared to Q3 with promotional offers offsetting headline price increases. EBITDA grew by 22.9% driven by the increase in revenue and economies of scale, partially offset by higher customer acquisition costs and increased interconnection costs.

There was a minor quarterly in messaging revenue – Messaging revenue was at GBP 51 million, an increase of 4.08% compared to last quarter’s revenue of GBP 49 million. This growth also benefited from mobile operators starting to charge for SMS termination during the second quarter of the 2012 financial year.


The company’s data revenue also increased to GBP 88 million, up 6.02% QoQ. Messaging and data contributed around 13% to the company’s service revenue. The company has stated that it had 35.4 million data customers at the end of 31st March 2012, up 81.5% year on year. 3G was available to Vodafone customers in 860 towns and cities across 20 circles at the end of the quarter.

On an annual basis, Vodafone’s India services revenues were at GBP 4215 million, an increase of 10.80%. There was a minor 6.97% increase in voice revenue but data revenue was up by 40.49%.

– ARPU: Vodafone India’s (blended) ARPU increased quarter on quarter at Rs 179 from Rs 173 in the previous quarter.

– PostPaid: Postpaid ARPU marginally decreased to Rs 735 quarter on quarter, from 738. Prepaid ARPU picked up from Rs 145 to Rs 151 during the quarter.

– Churn: Postpaid churn decreased to 19.5%, while prepaid churn grew to 80.8%. Please keep in mind that Vodafone accounts for churn over four consecutive quarters.

– Minutes of Use: increased to 142.12 billion from 133.2 billion, even though there was a price hike.

– Tax Case & Retrospective Taxing: On 20 January 2012 the Group received a favourable judgment from the Indian Supreme Court in respect of the tax case regarding the acquisition of Vodafone India Limited in 2007. The Court concluded that Vodafone had no liability to account for withholding tax on its acquisition of interests in Hutchison Essar Limited (now Vodafone India Limited) in 2007.

However on 16 March 2012 the Indian Government, through its budget announcement, proposed new retrospective tax legislation, which, if enacted, would countermand the verdict of the Indian Supreme Court and impose tax, interest from 2007 and, potentially, penalties on Vodafone International Holdings B.V (‘VIHBV’), notwithstanding the verdict of the Indian Supreme Court. On 17 April 2012 Vodafone served the Indian Government with a Notice of Dispute regarding the proposals, which are included in the Indian Finance Bill 2012, which Vodafone believes violate the international legal protection granted to Vodafone under the Bilateral Investment Treaty between India and the Netherlands. According to Vodafone, the action of the Indian government in introducing this retrospective legislation introduces substantial uncertainty, and there can be no assurance that any outcome will be favourable to Vodafone International Holdings or the Group. The Group did not carry any provision in respect of the India tax case at 31 March 2012 or at previous reporting dates.

– Option Agreement with Piramal: The agreements with Piramal in respect of its 11% shareholding in Vodafone India Limited (‘VIL’) contemplate various exit mechanisms for Piramal including participating in an initial public offering by Vodafone or, if such initial public offering is not completed by 18 August 2013 or 8 February 2014, respectively, or if Piramal chooses not to participate in such initial public offering, Piramal can sell its shareholding to Vodafone Group in two tranches of 5.485% for an aggregate price of between approximately Rs 70 billion (£0.8 billion) and Rs 83 billion (£1.0 billion).

On 4 February 2012 Vodafone had announced that Piramal Healthcare (‘Piramal’) had agreed to purchase approximately 5.5% of the issued equity share capital of Vodafone India Limited (‘VIL’) from ETHL Communications Holdings Limited for a cash consideration of approximately INR 30.1 billion (£385 million) taking Piramal’s total shareholding in VIL to approximately 11%.