Vodafone India, the country’s second-biggest telecommunications company, on Friday said its high-margin data revenues slowed down during the April-June quarter to about 22.3% compared to the pace in previous quarters, hurt by slower uptake in data services by its subscribers, which in turn dragged down its overall revenues. “Our active data customer base increased to 69.7 million customers from 66.8 million one year ago. The 3G/4G customer base grew to 32.3 million, up 46%, and smartphone penetration in our four biggest urban areas is now 54%,” Vodafone Group Plc, the parent company said in its earnings statement for its India operations on Friday.
Vodafone India’s reported data browsing revenue grew marginally at 13.5% during the quarter from 274 million pounds to 311 million pounds a year-ago.
The slower data revenue, in turn hurt the overall revenue for the Indian unit of the British telecommunications company, only marginally helped by its mainstay voice business and lower regulatory impact. Vodafone India’s organic revenue during the just-ended quarter grew about 6.4% compared to 5.3% during the quarter earlier, but declined by 3.7% to 1,510 million pounds. Its reported services revenue fell 3.4% to 1,519 million pounds in the latest quarter from 1,573 million pounds during the same quarter a year earlier.
“Excluding regulatory drags including MTR (mobile termination rate) cuts, roaming price caps and an increase in service tax, service revenue grew 7.7% compared to 10.2% in the fourth quarter of the prior fiscal year. The slower pace of growth mainly reflects the reversal of the leap-year effect and lower intra-circle roaming revenues,” Vodafone said in its earnings statement.
“Voice revenues returned to growth as competition eased, despite lower average minutes of use per customer.”
Still, the company is adopting a cautious but aggressive approach to shore up its data revenues as it is a high-margin business that could potentially increase profits. During the quarter, Vodafone India said it added 3,300 new sites to offer 3G services taking the total to 59,000 sites covering 96% of the targeted urban area. As far as 4G coverage, the company has 9,700 sites with overage of 45% of its data revenue spread over five key circles, it said.
“We expect 4G coverage to increase to over 60% of our data revenues by year-end, ahead of the upcoming spectrum auction,” the company said.
“Given the high cost of spectrum, we intend to take a disciplined approach to further 4G rollout.”
Vodafone Group said that it is continuing with its preparations to launch a public share sale of the Indian subsidiary through an Initial Public Offering, but did not disclose the details.