Vodafone revenue: an analysis of performance in main countries

Telecom major Vodafone has shown mixed results in its Q1 operations, ending June 30, 2011. The global operator has reported a growth in revenues of 3.5 percent at 11.65 billion pounds for the April-June quarter, as compared to revenues of 954 million pounds during the same period last year.

Service revenue rose by 2.6 percent to 10.86 billion pounds. Profits have been driven mainly by significant growth in Asian and Africa markets, with India leading this trend with a 9 percent increase in revenues to 1.03 billion pounds.

According to TRAI data, Vodafone is the number two operator currently in India, based on revenue figures which were pegged at INR 79997.10 million for the quarter ending March 2011.

The group reported a year-on-year increase in India data subscriber numbers of 189 percent, totaling 16 million data subscribers in India till the end of June. This shows a steady growth in mobile internet uptake in India, propelled by 3G.

Since its India launch in February this year, 3G is available in 147 towns and cities across 12 circles. Vodafone’s 3G subscriber numbers have increased from 2 lakh subscribers in March to almost 5 lakh at the end of June 2011.

Vodafone Essar, which was leading the MNP race till 2 months ago, adding over 50,000 new customers as of March 2011, is now second only to Idea Cellular, with 6,33,589 new customers at the end of May, according to TRAI. 

Service revenue in India grew by 16.8 percent, driven by a 29.8 percent increase in Vodafone’s customer base, stabilisation of mobile voice pricing in the market and a 70.4 percent growth in data revenue.

The growth in India was driven by an increase in sales of data-enabled handsets and the continued impact of successful marketing campaigns. Whilst competition in the market remains high, the effective rate per minute is stabilising as a result of a focus on promotional offers rather than further ongoing price reductions. 

In Africa, Vodacom’s service revenues grew by 7.8 percent, driven primarily by South Africa, where strong underlying growth in data revenue of 35.4 percent and good customer net additions more than offset the impact of an MTR cut effective from 1 March 2011. Data revenue was driven by higher penetration of smartphones and the success of data bundle offers, as well as continued growth in mobile broadband.

Vodacom continued to invest in the network, adding 107 3G base stations during the quarter. Besides, Vodacom’s operations outside South Africa also continued to improve, with service revenue growth of 24.8 percent, driven by strong customer net additions across the portfolio and increased ARPU in both Tanzania and Mozambique. In the last quarter, Vodacom’s revenues grew by 5.8 percent. Ghana saw strong service revenue growth of 27.1 percent and launched its 3G network on 29 June 2011. Data revenue growth in this market was 42 percent in the quarter.

In the Middle East, Turkey once again had a lead with a strong organic service revenue growth of 32.1 percent driven by strong growth in voice and data revenue resulting from a larger contract customer base and higher penetration of smartphones, as well as good growth in enterprise. This is in comparison to its revenue growth of 28.9 percent in the last quarter, that followed rebranding and a major network upgrade.

In Qatar service revenue grew by 69.2 percent driven by 42.5 percent growth in the customer base. However, in Egypt where the economic environment is still challenging due to the civil war, service revenue declined by 1.0 percent, driven by continued pressure on pricing and the reduction in visitor revenue as tourism slowed. This was partially offset by 30.8 percent growth in the customer base and improved voice and data usage.

Overall, revenue in Africa, Middle East and APAC increased by 6.9 percent, while organic service revenue increased by 8.7 percent, led by consistently strong performance in India and Africa.

In Europe, service revenue increased by 1.1 percent, as growth in Albania, the Netherlands and Turkey more than offset a decline in the rest of the region, particularly in Greece, which continued to be impacted by the challenging economic environment and competitive factors. Vodafone UK reported an increase of 1.7 percent in service revenues, while Germany reported revenues of 0.2 percent.

However, Spain reported a decrease in organic service revenue of 9.9 percent, while Italy reported a drop of 1.5 percent, due to tariff reductions. In the Netherlands service revenue increased by 0.5 percent, which was a decline on the previous quarter due to flattening MVNO revenue, lower messaging revenue growth rates and price competition, partially offset by the penetration of integrated tariffs.

New Zealand’s service revenue growth was also impacted by an MTR cut effective from 6 May 2011, and network difficulties experienced towards the end of the prior financial year in Australia adversely impacted growth in the Australian market. European smartphone penetration was 19.5 percent, as compared with 13.6 percent in Q1 fiscal 2011.


On a Group level, data revenue grew by 24.5 percent to 1.5 billion pounds, representing 13.7 percent of total service revenue. Growth in mobile internet revenue was reported at 44.2 percent in Europe and 52.7 percent in AMAP. Enterprise revenue grew by 1.7 percent, comprising growth of +0.7 percent in Europe and +12.9 percent in AMAP.

Data revenue within this segment increased to 21.2 percent of enterprise service revenue due to higher smartphone penetration and internet usage. Messaging revenue of 1.3 billion pounds grew by 5.3 percent. Fixed revenue of 0.9 billion pounds grew by 6.4 percent to represent 8.3 percent of Group service revenue. Vodafone has now reported 8.6 million fixed customers globally, including 6.2 million fixed broadband customers.

By Beryl M
[email protected]