Vodafone logs 26% growth in profit

Average revenue per user data put up good show

PTI | May 23, 2012



The country's second largest mobile operator Vodafone on Tuesday reported a 26.3 per cent rise in pretax profit at Rs 8,549 crore on the back of an improvement in average revenue per user and massive increase in revenue from data services.

"We are happy to announce an overall healthy growth in our business, which makes India operations the sixth largest in terms of revenue for the Vodafone Group," Vodafone India Managing Director and Chief Executive Marten Pieters told reporters in Mumbai.

The total revenue of the operator, which is in the midst of a controversy over tax on its acquisition of Hutchison's stake in Hutchison-Essar for USD 11.2 billion in 2007, rose by 19.3 per cent to Rs 32,564 crore in 2011-12 fiscal.

Announcing Vodafone's first-ever earnings since it entered the country in 2007, Pieters said, "We have had a really good year with very strong operational performance, continued revenue market share (RMS) growth and an improvement in margins.

"Our new circles have performed very well and we now have over 10 per cent RMS in four of the seven circles. We crossed the milestone of 150 million customers."

After a long gap, the industry saw the key profitability parameter average revenue per user (ARPU) rising, Pieters said, adding Vodafone's ARPU rose a tad over 5 per cent during the year from Rs 170 in Q1 to Rs 180 in Q4.

He also said the numbers include revenue from Indus Towers in which Vodafone has 42 per cent interest.

The impressive show was helped by Rs 2,647 crore revenue from data services in FY2012, up 50.8 per cent from Rs 1,756 crore in FY11, chief financial officer Colman Deegan said.

Deegan further said, the company, whose subscriber base crossed 15.5 million in the year, had a net debt at Rs 30,000 crore. It plans to spend Rs 6,216 on capex this financial year.

When asked about debt reduction plan, Deegan said, there is no such plan as of now.

Operational performance improved further with customer base crossing the 150 million mark, taking its revenue market share (RMS) to 20.6 per cent.

"Pricing showed clear signs of stabilisation after a prolonged price war," Pieters said.

The company also said data users soared 81.5 per cent to 35.4 million, while the company could attract 1.7 million customers from other operators through the mobile number portability. This makes Vodafone the second best net gainer of the MNP platform, Pieters said.

The company attributed the robust earnings to service revenue as well as higher customer base.

The growth also came from mobile operators starting to charge for SMS termination during the second quarter of the 2012 financial year.

During reporting period, the company entered the Orissa, Bihar, Madhya Pradesh, Assam, North East, Jammu &Kashmir and Himachal Pradesh circles.

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