Vodafone India outpaces other group units, posts 15% growth in December quarter

MUMBAI: Vodafone’s Indian unit outpaced its group counterparts to report 15% organic growth in revenue in the quarter through December, as subscribers used more of its premium data services, even as the basic voice telecom service remained under pressure, like its top rivals. Organic service revenue, which takes out items like handset sales and forex fluctuations, at the local unit of UK’s Vodafone Group rose to £1.1 billion (Rs 10,786 crore). In the July-September quarter, it had posted revenue of £1.02 billion. At the current rate, the India unit contributes about 10% of the parent’s revenue. The company is ranked No. 2 in India, with nearly 179 million subscribers, which is the most Vodafone Group has in any country.

The group retained its outlook for the financial year that ends in March, implying year-end earnings before interest, tax, depreciation, and amortisation of Rs 11,373 crore for India.

“Growth in India has accelerated again, driven by data,” Group chief executive Vittorio Colao said in a news release.

Globally, Vodafone’s revenue in the past quarter rose 13.5% to £10.88 billion. Organic growth was 0.7%.

Colao said the company saw a recovery in its European business, driven by improved commercial execution in both mobile and fixed line over the past few quarters, combined with strong data demand and a more stable pricing environment.

For India — where the company faces likely bruising spectrum auctions in March — mobile Internet revenue rose 70% after more customers started to use data services. Vodafone said it now has 59 million data customers, 30% higher than the same period a year earlier. Of these customers, 16.6 million are using high-speed 3G data.

Helped by the increasing base of data customers, the company said its average monthly revenue per user rose 1% from the September quarter to Rs 189. On Wednesday, Bharti Airtel, the industry bellwether, had also reported a rise in subscriber revenue, in spite of voice tariffs remaining under competitive pressure. A surge in the use of smartphones has pushed up premium high-margin data services, boosting growth for mobile phone operators.

This has helped telecom operators to improve key parameters such as average revenue per user (ARPU) and average realisation per minute (ARPM). However, pricing competition is again hurting the voice business, as was apparent in the recent results of market leader Bharti Airtel and No. 3 Idea Cellular. Vodafone also reported a decline in absolute voice usage by 6.6%, with voice rates remaining flat.