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Vodafone India added 2.2 million data customers in Q3FY18

Vodafone India’s data connections stood at 69.9 million subscribers for the quarter ended December 31, 2017 (Q3FY18). This was an increase of 2.2 million from the previous quarter, when the number of data connections were 67.7 million. The telco had lost 1.5 million data connections in Q2FY18, while it had added 2.3 million data connections in Q1FY18.

In Q3FY18, Vodafone India’s mobile broadband base (which includes 3G and 4G customers) increased by 6.5 million from 46 million to 52.5 million, a quarter-on-quarter (QoQ) increase of 14.1%. In Q1FY18, its mobile broadband base was 41.1 million.

Data usage per subscriber at the end of the quarter stood at 2.8 GB, up from 2.7 GB in the previous quarter. Note that users with less than 1 MB data usage are not taken into consideration for this. Vodafone India also mentioned that data traffic increased fivefold in Q3FY18, due to steep decline in data prices. It added that “this reflected strong 4G customer growth, up 57% year-on-year (YoY) to 105 million (a quarterly increase of 11.5 million), together with increased data allowances.”

Overall, Vodafone’s customer base in India stood at 212.5 million, with 5.1 million new customers added in Q3FY18.

Service Revenue

Vodafone India’s service revenue stood at Rs 8,513.07 crore (€1.063 billion) for the the quarter, down 23.1% year-on-year (YoY) from Rs 11,612.38 crore (€1.45 billion).

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The company said that the decline in service revenue was “a result of intense price competition, which continued during Q3 as the market leader increased the competitiveness of its tariffs despite price rises announced by the new entrant. This was exacerbated by a 29.2% decline in interconnection revenues following an MTR cut on 1 October.”

Note that in October last year, Vodafone India had challenged the Telecom Regulatory Authority of India’s (TRAI) decision to reduce interconnect usage charge (IUC) for mobile-to-mobile calls from 14 paise per minute to 6 paise per minute in the Bombay High Court.

ARPU

Prepaid average revenue per user (ARPU) continued to decline: In Q3FY18 it declined by 28% QoQ, while the decline in the preceding quarter had been 24% QoQ.

Vodafone said that this reflected “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.”

Note that following the announcement of the merger of Vodafone India and Idea Cellular, Vodafone India has been classified as discontinued operations for Vodafone Group’s reporting purposes. Hence, unlike previous quarter, detailed financial performance for the quarter hasn’t been published.

Merger with Idea Cellular

As per the merger agreement between the two companies, Vodafone India will invest net debt equivalent to Idea’s net debt following the completion of the merger, plus Rs 2,500 crore in the joint venture. The joint venture will also receive Rs 7850 crore of expected proceeds from the announced sale of Vodafone and Idea’s standalone towers to American Tower Corporation.

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The companies had signed a definitive deal in March 2017, following which the Competition Commission of India (CCI) had approved the proposed merger of Vodafone India with Idea Cellular, in July 2017. The following month, August 2017, the joint venture received the nod from the Securities and Exchange Board of India (SEBI). The only pending approval is of the National Company Law Tribunal.

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