Mumbai: Vodafone India’s revenue for the June quarter declined 31.1% to €959 million due to the ongoing tariff war in India’s telecom industry and cuts in interconnection usage charges (IUC) for both domestic and international calls, the company said in a statement on Wednesday. Vodafone Group Plc’s services revenue from its India business stood at €955 million in the quarter, down from €1,385 million in the year-ago period.
Vodafone India, along with Kumar Mangalam Birla-owned Idea Cellular, settled government dues worth ₹ 7,200 crore earlier this week to get the final approval for their merger from the Department of Telecommunications (DoT).
“In India, where competition remains intense, we have now received conditional approval from the Department of Telecom for the Vodafone-Idea merger, which we aim to close before the end of August, allowing us to unlock substantial synergies," said Vodafone Group chief executive Vittorio Colao. “The group’s overall performance provides us with the confidence to reiterate our outlook for the year," Colao said, adding it had made good progress in reducing absolute operating costs for the third year running.
During an analyst presentation, the company said that the “revenue declines (are) moderating and the merger is on track to close shortly" as its seeks to close the India joint venture and begin to capture synergies quickly for both Vodafone-Idea as well as Indus-Infratel merger.
Telecom tower firms Bharti Infratel Ltd and Indus Tower Ltd are merging to create the largest mobile tower operator in the world outside China.
According to Vodafone, its India unit continued to retain its high-value customers, albeit at lower price levels, with the contract average revenue per user (ARPU) declining 20%, and prepaid ARPU by 28% in the quarter. “Our total customer base declined by 3.0 million quarter-on-quarter, reflecting the ‘SIM consolidation’ trend across the market, and now totals 219.7 million."
“The number of data users has continued to increase. We now have 77 million data users of which 30.9 million are 4G," said Vodafone in its analyst presentation, adding that it managed to keep off the impact of the tariff war as its subscribers preferred spending on a single SIM, following the increase in “unlimited" offers.
“Our network investments have created a strong platform to capture this data demand, and we continue to have the leading or co-leading network NPS scores in 14 out of 20 markets, including India," Vodafone said in the statement.
Vodafone’s data traffic grew 57% in Q1, registering 56% growth in Europe and 58% in the Africa-Middle East-Asia Pacific (AMAP) region. “Additionally, Indian data traffic quadrupled following a steep decline in data prices. This largely reflected increased smartphone usage as data allowances expand, with customers now using 3.3GB on average each month." Europe was at 2.8GB and AMAP at 2.3GB, while India topped with 4.6GB.