Vodafone said its India service revenue fell 20.4 percent to €4.670 billion or $5.568 billion in fiscal 2017-18 due to hyper competition from Reliance Jio and Airtel.
Vodafone Group’s global revenue decreased 2.2 percent to €46.6 billion or $55.55 billion and service revenue fell 4.5 percent to €41.1 billion or $48.99 billion.
Vodafone India service revenue declined due to intense price competition from Reliance Jio and Airtel. Bharti Airtel, the market leader, increased the competitiveness of its tariffs during the second half of the year, triggering further price reductions by Reliance Jio in the fourth quarter.
“This was further exacerbated by cuts to both domestic and international MTR rates in the second half of the year,” Vodafone said.
Adjusted EBITDA of Vodafone India fell 34.5 percent, with 5.2 percentage point drop in adjusted EBITDA margin to 22.1 percent. This reflected lower revenues, partially offset by significant cost actions and a provision release in the fourth quarter following positive legal judgements.
Vodafone India achieved cost reductions from active network site sharing, the renegotiation of tower maintenance contracts and the closure of sites with low utilisation.
Capital expenditure to sales ratio was 20.4 percent, Vodafone India said. It added 48,500 sites in the year. As a result of this investment, Vodafone India was able to carry 4.5x more data traffic than last year.
Net debt of Vodafone India was €7.7 billion at the end of the period, down from €8.7 billion at the end of the prior financial year due to the positive translation impact of closing foreign exchange rates on the debt balance of €1.2 billion and proceeds from the sale of Vodafone India’s standalone towers to American Tower Corporation of €0.5 billion.
Vodafone will 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 the completion of its merger with Idea Cellular.
“We are making good progress in securing the necessary regulatory approvals for the merger of Vodafone India and Idea Cellular. The merger is expected to complete in June 2018,” said Vodafone Group CEO Vittorio Colao.