Reliance Jio impact: Vodafone India revenue in Q1 falls 13.9 pct

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New Delhi | Published: July 22, 2017 5:17:15 AM

During the quarter, Vodafone added 2.9 m subscribers (4.4 m in Q4 2016). It ended the June quarter with a customer base of 211.9 m

Reliance Jio, Vodafone India, revenueDuring the quarter, Vodafone added 2.9 m subscribers (4.4 m in Q4 2016). It ended the June quarter with a customer base of 211.9 m

The country’s second largest telecom operator, Vodafone India on Friday reported a 13.9% decline in its service revenue, which includes forex loss, at Rs 11,624 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. Even as the company witnessed a decline in its data revenues, it said that data usage during the quarter showed a healthy growth. Vodafone attributed the decline in revenue to “continued price competition from the new entrant and incumbents.” However, even as the revenue fell on a year-on-year basis, the firm said sequential quarterly trends are stabilising as “SIM consolidation is beginning to improve ARPU in the low-value segment,” which is helping to offset pricing pressure in the mid and high-value segments.

During the quarter Vodafone added 2.9 million subscribers (Q4 2016: 4.4 million). It ended the June quarter with a customer base of 211.9 million.
“Our focused investment strategy delivered a further improvement in our revenue market share in our leadership circles, based on regulatory disclosures for the prior quarter,” it said.

Its data browsing revenue declined by 20.4% (against 15.9% fall in Q4 2017) reflecting ARPU dilution from lower unitary prices, which also declined 67% year-on-year (Q4 fall of 38%). However, Vodafone saw a 78% year-on-year growth in its monthly data usage per customer to 1.1GB (Q4: 0.6GB). “Our active data customer base grew for the second quarter in a row, increasing to 69.2 million, with the number of 3G/4G customers rising by 3.4 million to 41.1 million,” the firm said adding that an intense competitive environment led to a “very substantial” increase in data allowances. Vodafone’s voice revenue fell by 14.2% (Q4 2017 decline of 13.2%) as the benefit of higher incoming revenue and a larger customer base was offset by a 32% year-on-year decline in voice prices as the market moved to unlimited voice tariffs.

Jio’s free offers on voice and data for the first six months followed by free local and STD calls as well as data prices as low as R3.06 per GB forced incumbents including Bharti Airtel, Vodafone and Idea Cellular to respond with low prices bundled offers in a bid to ring-fence their subscribers. This led to the firms taking a hit on their profits and margins.

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