Vodafone reported 20 percent increase in revenues in Asia Pacific, Africa and the Middle East for the year ended March 31, 2011. This is also the first time that the telecom major has shown a profit in India, since its entry into the country in 2007, in a partnership deal with Essar.
Vodafone Essar posted a 134 percent jump in operating profit to 15 million pounds for the 12 months ended March 2011, compared with a loss of 37 million pounds during the corresponding period of the previous year. The telco also recorded an operating-free cash flow of 433 million pounds for the 12 months ended March 2011. Revenues for the three months ended March 2011 were up 17.2 percent to 988 million pounds compared with the quarter ended March 2010.
According to Vodafone, emerging markets contributed a profit of 11.8 percent, to the group’s total revenues of 45.9 billion pounds, which is up 3.2 percent from the last fiscal.
In India, Vodafone Essar reported a total of over 2 lakh 3G subscribers in March 2011, barely a month after launching 3G services in India, and said that it is adding 35,000 new customers on a daily basis. The operator was also the biggest gainer from MNP, adding over 50,000 customers as of March 2011.
India also accounted for 80 percent of the 12.9 million customers that that Vodafone added globally from January-March 2011, touching a figure of 136.9 million subscribers during the year, up by 39 percent, despite a continued fall in ARPUs. These figures are crucial for the operator in India, especially at a time when it is being dodged by tax evasion issues and other problems with its Essar partner.
According to a statement reported yesterday, Vittorio Colao, CEO, Vodafone Group, said that there was a very good chance that Vodafone might spin-off its Indian wing through a separate stock market float, as its stake in its Indian division is set to exceed the maximum allowed under local law. However, in a separate statement, Colao said, Our performance in India has been driven by increasing voice penetration and a more stable pricing environment.” Vodafone is also considering starting an IPO in India next year for Vodafone Essar, similar to its South African unit, Vodacom, after it settles its outstanding legal issues in the country. Vodafone also hinted last month on plans to buy an additional 33 percent stake in Vodafone Essar for $5 billion from Essar, raising its stake in India to 75 percent.
While the telecom giant’s revenues were up 16.2 percent in India, in Africa, Vodacom showed an increase in revenues of 5.8 percent. However, Vodafone’s strongest revenue growth came from Turkey, reporting a 28.9 percent increase in revenues, following rebranding and a major network upgrade. The customer base in the country grew by 86 percent to reach 4.7 million high-ARPU subscribers in total. This is significant, as the rest of the operator’s Europe revenues witnessed a significant drop due to the ongoing recession, causing overall net profits to fall by 8 percent.
On the whole, Vodafone has reported strong performance for its data services, up by 26.4 percent, and its successful smartphone penetration in Europe, which has shown an increase from 11.6 percent to 18.7 percent, year-on-year. Vodafone’s stake in Verizon Wireless has also given it a profit of 8.5 percent to 4.6 billion pounds.
The past year has seen further strong performances in our key revenue growth areas of data, emerging markets and enterprise, and we have gained or held market share in most of our key markets. Continuing network investment is an important differentiator for Vodafone, improving the customer experience and giving us leadership in smartphone penetration and in customer take up of data plans,” said Vittorio Colao, CEO, Vodafone Group.