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Vodafone India, which is close to a merger with Idea Cellular, has posted a 31.1 per cent fall in first-quarter revenues impacted by intense competition and mobile termination rate cuts.
The operator’s June quarter service revenue fell to €955 million, compared with €1,385 million recorded during the comparable first quarter of the previous financial year. The company attributed the decline to “intense ongoing” price competition between the market leader and the new entrant.
Excluding the impact of MTR cuts, service revenue declined by 9.6 per cent during the reporting quarter.
As pre-paid bundle prices remained stable during the three months, the service revenue declined 0.2 per cent, compared with the preceding March quarter, Vodafone said in a statement.
“We continued to retain our high-value customers albeit at lower price levels, with contract ARPU declining by 20 per cent and pre-paid ARPU by 28 per cent in the quarter. This pricing pressure was mitigated as customers consolidated spending onto a single-SIM following the increased penetration of ‘unlimited’ offers, which have now been adopted by 29 per cent of our pre-paid customer base,” the company said in a statement.
“Our total customer base declined by 3 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,” it added.
Merger with Idea
On March 20, 2017, Vodafone India had announced an agreement to merge with Idea Cellular. Earlier this month, the Department of Telecommunications provided a conditional approval for the scheme.
“In India, where competition remains intense, we have now received conditional approval from DoT for the merger of Vodafone India and Idea Cellular, which we aim to close before the end of August, allowing us to unlock substantial synergies,” Vittorio Colao, Group Chief Executive at Vodafone Group, said.
The company is also making good progress in securing the regulatory approvals for the announced merger of Indus Towers into Bharti Infratel. The merger, for which it received the Competition Commission’s approval in July, is expected to close before March 2019, it added.
Earlier this week, Vodafone India and Idea Cellular had settled DoT’s dues worth ₹7,248 crore, but under protest, and are now awaiting the final nod to create the largest telecom company with about 436 million customers.
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