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A 3G customer in India is worth 3.6 times more than a 2G one – Vodafone


Telecom operator Vodafone said that a 3G customer in India is potentially worth 3.6 times more than a 2G customers in its Q4-2014 earnings concall. According to the company, 3G bandwidth usage in India has reached 90%, without considering the newly available frequencies, (which is purchased in the recent spectrum auctions).

Data revenues for Vodafone in India grew by 62% for the company, while consumption volumes grew by almost 80%. The company said it had increased the number of active data users to 64 million, a Year on year growth of 23%. Interestingly, Vodafone mentions it currently has around 19 million 3G data users in India, in increase of 12 million users from 7 million last year.

There is still further potential for 3G growth in India, which, it says, is a “country that keeps on giving”.


Other notes from Vodafone’s earnings conference call:

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On revenue growth: In India, the company said it made a ‘double digit’ revenue growth, although it was lower than the last quarter. Usage of voice declined in minutes of usage, however prices remained stable. Interestingly, Vodafone said that Indian numbers will not be as good in the upcoming two quarters as this quarter, it was ‘lapping on the India price increases’.

Overall, the company saw 29.6% EBITDA growth compared to last year, despite expenses incurred by its ‘Spring’ project aimed at improving network quality in India.

On M-Pesa and future plans: The company mentions its workin on M-Pesa in many markets and currently has around 20 million customers and 2,73,000 sales agents internationally. The network will look to scale up this initiative, which it mentions now has a proper distribution network, and is ready to be monetized commercially.

On India strategy: The company mentions that the Indian market is saturated in terms of price increase, so its unlikely to increase its pricing. Instead it expects growth to come from data. Overall Vodafone forecast 1% to 5% growth for the coming year, taking in consideration fluctuations in Indian regulations. Additionally, the company paid off around 200 million pounds as a one time payment for issues like Phones 4U deferred payments in India, as well as its payment to Indus for IRU.

On spectrum: According to Vodafone, spectrum has been expensive globally, and has cost the company around 2 billion pounds per year, including the recent India auctions. However, the company said it would renew and extend 900 megahertz and 1800 megahertz bandwidths, 4G spectrum in Europe and 3G spectrum in India.

Also read:

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– Vodafone sells 4.2% stake in Airtel following new norms
– Vodafone India looking to launch IPO by end of Q4-FY16: Report

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