Vodafone India’s Jan-Sept service revenue falls 16%

India’s second-largest telecom operator Vodafone announced ~19,002-crore service revenue in the half year ended September, down 15.8 per cent from the same period last year.

The company blamed competition from new operator Reliance Jio and incumbent players, seasonality, and the goods and services tax for the weak results. Earnings before interest, depreciation, tax and amortisation took a massive 39.2 per cent beating, declining to ~4,075 crore from ~6,704 crore last year. Margins were 21.4 per cent, down from 29.6 per cent a year ago. “Amidst continuing intense competition, we delivered a stable performance overall. We see signs of positive developments with consolidation of smaller operators,” said Sunil Sood, managing director and chief executive officer, Vodafone India.

Vodafone increased its user base by 3.3 per cent, year-on-year, to 207 million customers, over half of them in rural India. The average revenue per user declined to ~146 from ~186 last year following “stiff price competition”, the company said.

Reliance Jio has continued to be a pain point even as it started paid services this year with other telecom operators unanimously blaming it for decreased revenue. While the number of Vodafone’s 3G/4G users has jumped 28 per cent to 46 million during the year, the total number of data users declined by almost 5 million. The impending merger between Vodafone India and Idea Cellular, another operator facing huge losses, will create a telecom entity with over 1,850 MHz of spectrum in multiple bands.

Vodafone further informed that both companies had separately agreed to sell their respective tower businesses in India to ATC Telecom Infrastructure for an aggregate enterprise value of ~7,850 crore.