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Impacted by “intense price” competition from the new entrant, Vodafone India posted an 18.7 per cent decline in its service revenues to £4,643 million for the financial year ended March 31. The operator’s service revenue for the year-ago period stood at £5,834 million.
“Losses continued in India as service revenue declined 18.7 per cent as a result of intense price competition from the new entrant, aggressive competitor responses and a significant reduction in mobile termination rates,” Vodafone Group said on Tuesday.
The mobile operator, currently the second-largest in the country by users, had posted a 21.2 per cent fall in service revenue in the fourth quarter and a 23.1 per cent decline in the third quarter.
“During the second-half of the year, the market leader increased the competitiveness of its tariffs, triggering further price reductions by the new entrant in the fourth quarter. This was further exacerbated by cuts to both domestic and international MTR rates in the second half,” it said.
On a sequential basis, local currency service revenues excluding regulation declined 3.8 per cent quarter-on-quarter, it added.
During the year under review, the company posted an operating profit of £1,299 million, compared with a loss of £4,171 million recorded during the comparable year-ago period.
Idea merger
On the company’s proposed merger with Idea Cellular, the third-largest mobile operator in the country, Vodafone said it is expected to be completed in June.
“We are making good progress in securing the necessary regulatory approvals for the merger of Vodafone India and Idea Cellular,” it said.
Following the completion of Idea’s equity raising in February, under the terms of the merger agreement with Idea the Group intends to inject up to £1 billion of incremental equity into India, net of the proceeds of the sale of a stake in the joint venture to the Aditya Birla Group, prior to completion.
In India, data traffic quadrupled following a sharp decline in data prices, while smartphone usage in the country continued to grow rapidly to 3.5 GB per month.
The company’s stake in Indus Towers, the Indian towers company in which Vodafone owned a 42 per cent stake, achieved revenue growth of 6.8 per cent and adjusted EBITDA growth of 4.7 per cent in rupee terms. In total, Indus Towers paid dividends of £138 million to the group during the year.
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