Vodafone India revenue drops 5.5% in third quarter due to Jio

Vodafone 4G coverageVodafone India said its revenue fell 5.5 percent to €1,450 million or $1,563 million in the third quarter ended 31 December 2016 – impacted by free voice and data offers from Reliance Jio and currency issue.

Vodafone Group CEO Vittorio Colao said: “In AMAP, our strong organic performance in South Africa and Turkey was partially offset by India, where the sector is affected by free services from the new entrant.”

“We anticipate intense competitive pressure in India in the fourth quarter and are taking a series of commercial actions, including the extension of 4G services to 17 leading circles. We have entered discussions with the Aditya Birla Group about an all-share merger of Vodafone India and Idea Cellular,” said Vittorio Colao.

HIGHLIGHTS of Vodafone India revenue

# Revenue fell 5.5 percent to $1,563 million
# service revenue increased 5.4 percent in Q2
# Data revenue growth slowed to 0.6% in Q3 from 16% in Q2
# Data customer base fell to 65 million in Q3 from 69.6 million in Q2
# 3G / 4G customer base declined slightly to 35 million
# Data pricing of Vodafone declined 11 percent
# Growth in data usage per customer slowed to 15% from 28% in Q2
# Voice revenue declined 3% in Q3 from +2.7% in Q2
# Mobile customer base increased by 4 million
# 4G presence increased to 17 circles

Vodafone India’s service revenue increased 5.4 percent in Q2.

Vodafone India increased overall customer base and continued to retain high value customers, but saw increasing pressure on both prices and customer usage.

Data browsing revenue growth slowed from 16 percent in Q2 to 0.6 percent in Q3 due to the impact of free services from Jio.

The presence of Reliance Jio drove a quarter-on-quarter decline in active data customer base to 65 million in Q3 from 69.6 million in Q2, mainly reflecting fewer 2G users.

Vodafone India said its 3G / 4G customer base declined slightly quarter-on-quarter to 35 million, and smartphone penetration is 35 percent.

Data pricing of Vodafone India declined 11 percent year-on-year, while the growth in data usage per customer slowed to 15 percent compared to 28 percent in Q2, reaching 505MB in Q3.

Voice revenue of Vodafone India declined 3.0 percent in Q3 against +2.7 percent in Q2 as the benefit of higher incoming volumes and a larger customer base was offset by lower usage per customer and a 4 percent year-on-year decline in voice prices.

Total mobile customers of Vodafone India increased 4 million over the period, giving customer base of 205 million.

Following the conclusion of the spectrum auction in October 2016, Vodafone India offers 4G services in 17 circles against 9 circles prior to the auction. These circles cover around 91 percent of Vodafone India service revenues and 94 percent of its data revenues.

In AMAP, data adoption was rapid, supported by network investment and the relative scarcity of fixed internet access.

Average usage per smartphone customer increased 50 percent year-on-year to 1.0GB. The potential for future data growth is also substantial with only 15 percent of active data users on 4G, although the degree of monetisation of data growth in India is uncertain given the current disruption in the market.

Baburajan K
[email protected]

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