Vodafone Plc’s results for the December quarter reveal that its India subsidiary, Vodafone India Ltd, witnessed a decent 4.3% growth in volumes compared to the September quarter. Earlier this week, Bharti Airtel Ltd had disappointed investors, reporting a mere 0.8% increase in volumes. In fact, Vodafone’s growth fell almost exactly between Bharti’s and Idea’s, which had reported a 7.3% increase in the total voice traffic carried on its network.
The trend with Vodafone’s voice revenue per minute was very similar. While Bharti managed to increase realizations on voice calls by 3.5% last quarter, Idea’s average revenue per minute was flat at September quarter levels, despite the tariff hikes taken by the company in May/June 2011. Vodafone has reported a 1.7% increase in voice revenue per minute to 47 paise. The company’s presentation to analysts mentions that the average realized rate on outgoing calls has increased from 59 paise in the September quarter to 61 paise. The company’s revenue per minute was flat in the September quarter when compared to the June quarter, at a time when both Bharti and Idea had reported an increase in their average realized rates.
It’s important to note that the increase in Vodafone’s realizations last quarter hasn’t impacted volume growth. With both volumes and revenue per minute rising in tandem, revenues from the voice business rose by 6.1% in rupee terms to Rs 6,314 crore.
Messaging revenues fell by 15.6% sequentially and revenues from data traffic grew by 1.2%. Overall revenues rose by 5.2% to Rs 8184 crore. Due to the sharp depreciation in the rupee versus the Bristish pound, Vodafone India’s revenues reflect a 3% drop in the parent company’s reporting currency. The company provides regional profit data only on a half-yearly basis, so one will have to wait until the March quarter results announcement to see how the Indian subsidiary is doing with respect to profitability.
Compared to the June quarter, when the tariff hikes were introduced, Vodafone has managed to grow volumes by 4.4%, slightly lower than Idea’s growth of 4.9% and much better compared to the 1.1% drop reported by Bharti. While Vodafone and Idea have been chasing growth, especially by being aggressive in new customer acquisitions, Bharti has, till recently, been ended up trading volume growth in favour of tariff increases.
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