Vodafone India's H1 operating profit falls 39%

Lloyd Doyle
November 14, 2017

Vodafone reported a service revenue of Rs. 19,002 crores in H1 FY18, down from Rs. 22,579 crores it reported in H1 FY17. Ltd for about $1.2 billion (Rs. 7,850 crore).

The standalone tower businesses of Vodafone India and Idea Cellular are pan-Indian passive telecom infrastructure businesses, comprising a combined portfolio of approximately 20,000 towers with a combined tenancy ratio of 1.65x as of 30 June 2017.

The telco that saw a capex investment of Rs 2915 crore in the six months ended September, saw its earnings before income, tax, depreciation and ammortisation (EBIDTA) margins drop to 21.4 per cent from 29.6 per cent when compared on a like to like basis.

"Due to the continued price competition from new operator and incumbents, seasonality and GST, Vodafone service revenue at Rs. 19,002 crores in H1 FY18 (down by 15.8%)", said Vodafone in its press statement. The operator said its service revenues were down on the back of 'continued price competition'. Reliance Communications last week reported a consolidated loss of Rs 2,709 crore for the same period.

"Amidst continuing intense competition, we recorded a gain of 0.6ppt in RMS in Q1FY18 (YoY) and delivered a stable performance overall". We see signs of positive developments with consolidation of smaller operators.

Vodafone India and Idea are in the process of completing a merger, which is expected to be completed next year once various approvals have been granted by the Indian authorities.

Revenue was down 20.3 percent on a year ago at 75.11 billion rupees, while average monthly revenue per user fell 6.4 percent from the previous quarter to 132 rupees.

Data traffic on its mobile network also grew as the company unleashed a host of data benefits under bundled data schemes.

"Data usage exploding and usage/sub (for users 1MB for Q2FY18) at 2.7GB". Growth was driven by higher smartphone penetration, now at over 38 percent of the total customer base. Results were helped by solid performance by the company's strategic business areas, namely data and Vodafone Business Services.

American Tower (ATC) is acquiring the tower units of both Vodafone India and Idea Cellular in separate agreements.

Other reports by Iphone Fresh

Discuss This Article