Vodafone India on Tuesday reported a 16.5% increase in total revenues at Rs 20,476.3 crore during the six months ended September as against the same period last fiscal, led by price hardening, growth in voice minutes and data revenues.
Expressing concern over the current telecom scenario ahead of the third round of the 2G spectrum auction, Marten Pieters, managing director, said though there has been improvement in terms of clarity on many issues, still some matters need to be addressed.
“Vodafone has always asked government for two basic things, we need more spectrum and allocated in a more transparent way. We want more level-playing field... If the government wants more profits from spectrum auction it should not punish operators that are buying more spectrum because they have more customers and are more successful in the market,” he said.
Out of the $7 billion committed by the group as part of Verizon deal, 10% or $700 million will be used for India over the next 2-3 years for data, retail and infrastructure.
On the IPO, Pieters said the IPO cannot go forward as of now due to lack of clarity on the licensing and spectrum issues as well as 100% acquistion of India operations.
Ämong the ongoing issues which have impacted the performance of the company, Pieters cited the 3G intra-circle roaming issue. “In the circles where we were using 3G ICR for our customers, we saw a drop of 50% of 3G customers in the first half. Since we cannot connect new ones, this will be soon a forgone business.”
Though he welcomed the mergers and acquisition rules, he said there is still uncertainty and lack of clarity over the process and the timelines. The company, however, is optimistic on the data front. It revealed its data subscribers grew to 42.5 million during the first half. Out of the total number 4.5 million are the 3G subscribers.
Data revenues for H1 stood at Rs 1,541.9 crore, which grew by 76.5%, while the browsing revenue accounted for 9% of the revenues. The company said that data usage and revenue growth has been led by increasing smartphone penetration at 10.7% of total base.
Pieters also said the company would continue to focus on the data segment. “We continue to show a healthy revenue growth driven by price hardening, an exponential growth in data and a solid subscriber base. Our focus on profitable growth has led to a strong margin improvement and to a strong operating free cash flow. We will continue to invest in our future growth areas of democratising data and driving financial inclusion through M-Pesa,” he said.
According to Goldman Sachs, Vodafone’s strong yoy growth implies that the larger telcos like Bharti Airtel, Idea Cellular along with Vodafone continue to benefit from a benign competitive environment. “Given improving cash flows and balance sheets for the top three telcos in India (Bharti, Vodafone and Idea) we expect the industry to consolidate in favor of larger telcos, particularly as the market moves towards data,” it said in a report.
There is now possibility that Vodafone may increase its incremental market share at the expense of Bharti or Idea if it follows an aggressive investment approach.
Spectrum call
The mobile phone carrier feels there are still some certain issues to be resolved
It is seeking more clarity in the process the auction is conducted and a level-playing field
It is planning to invest $700 million in India over the next 2-3 years for data, retail and infrastructure.
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