Vodafone India Q1 2017 Service Revenue Plunges by 8.7%

Lewis Hamilton of the United Kingdom

Service revenue, in fact, grew 0.43% sequentially in the April-June period from EUR1,379 million (Rs 10,327 crore) in the prior quarter.

Vodafone India on Friday reported a 13.9 per cent decline in its service revenue, which includes forex loss, at Rs11,624 crore (GBP 1.38 billion) for the quarter ended June 2017 on account of heightened competition in mobile tariffs due to the entry of Reliance Jio. "We now have 83.5 million 4G customers, including India and our joint ventures, across the 22 countries where we offer 4G, having added 8.8 million customers in the quarter", Vodafone said.

In May 2017, Vodafone announced that Vodafone Group would exchange a 35% indirect interest in Safaricom for 226.8 million new ordinary Vodacom shares, enabling the company to simplify the management of its sub- Saharan African holdings. The telco also nearly managed to hold on to its average revenue per user (ARPU) at Rs 141, compared with Rs 142 in the previous quarter.

Vodafone reported growth in service revenue in all of its European markets other than the UK. The transaction is subject to regulatory approvals and is expected to close in 2018.

Revenues in the United Kingdom continued to fall but the rate of decline slowed as it reported a drop of 2.7pc, to €1.8bn (£1.6bn), compared to a fall of 4.8pc in the previous quarter.

In Ireland the company's service revenue declined 2.5pc in the quarter, however excluding MRTs, revenue in Ireland grew 1.1pc supported by what the company said was "ongoing fixed customer growth".




"Rising competition has seen India hit a significant speedbump, jolting Vodafone to the extent that it took a multi-billion euro write-down and split the Indian operation from the wider group", said George Salmon, equity analyst at Hargreaves Lansdown.

While the company managed to retain high value customers in the June quarter, it conceded that the growth in its mobile customer base at 2.9 million was lower than 4.4 million in the previous quarter.

Vodafone's TV customer base in Germany stood at 7.7 million as of June 30 and was unchanged on three months earlier.

However, the FTSE 100-listed group remained confident the situation would soon improve, adding the merger with India-based rival Idea Cellular was on track to be completed before the end of the year.

Mr Colao went on to say that the performance gives Vodafone confidence in reiterating the company's outlook for the year.

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