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Vodafone India posted a 1.9% drop in service revenue in the quarter ended December to EUR1450 million (Rs10,556 crore), as competitive pressures triggered by the entry of Reliance Jio Infocomm hit prices, and de-monetisation hurt prepaid top-up volumes.
Vodafone ’s group chief executive officer (CEO)
Vittorio Colao said that their strong organic performance in South Africa and Turkey in Africa, Middle East and Asia Pacific (AMAP) region was partially offset by India, where the sector is affected by free services from new entrant.
“We anticipate intense competitive pressure in India in the fourth quarter and are taking a series of commercial actions, including the extension of 4G services to 17 leading circles”, Colao said in an earnings statement issued Thursday.
The new entrant in this case is Reliance Jio that entered the sector last September and has been adding about half a million customers a day, leveraging its free voice and data services. Mukesh Ambani-owned Jio entered the market with its Welcome Offer that provided free voice calling and data services along with a bouquet of Jio apps. The free services were extended in December to March 31, 2017, under the Happy New Year Offer. Jio's user base is around 80 million now. Vodafone India ended the December quarter with in 205 million customers.
The British telecom major reiterated that it was in talks to merge and deconsolidate its Indian unit, the country’s No. 2 telco, with Kumar Mangalam Birla-owned Idea Cellular, India’s third largest telco. The company said that if the transaction goes through, ‘it would result in Vodafone deconsolidating Vodafone India’. The merger talks, which entail Vodafone buying fresh shares of Idea, exclude the firm’s 42% stake in Indus Towers.
Although Vodafone India increased its overall customer base, it admitted to pressure on both prices and customer usage.
Vodafone India’s browsing revenue growth slowed to 0.6% from 16% in second quarter due to the impact of free services from Jio. “This drove a quarter-on-quarter decline in our active data customer base to 65.0 million (Q2: 69.6 million), mainly reflecting fewer 2G users,” said the firm in the statement.
Its 3G / 4G customer base declined quarter-on-quarter to 35 million. Voice revenue too fell 3% as the benefit of higher incoming volumes and a larger customer base was offset by lower usage per customer and a 4% year-on-year decline in voice prices.
Average revenue per user (ARPU) for December end quarter was Rs 158 compared with Rs171 in the previous quarter. When compared to the previous quarter, data usage per customer slowed to 15% and stood at 505 MB.
Vodafone India Q3 service revenue falls 1.9% on year; Reliance Jio, demonetisation hurt, Telecom News, ET Telecom
Vodafone ’s group chief executive officer (CEO)
Vittorio Colao said that their strong organic performance in South Africa and Turkey in Africa, Middle East and Asia Pacific (AMAP) region was partially offset by India, where the sector is affected by free services from new entrant.
“We anticipate intense competitive pressure in India in the fourth quarter and are taking a series of commercial actions, including the extension of 4G services to 17 leading circles”, Colao said in an earnings statement issued Thursday.
The new entrant in this case is Reliance Jio that entered the sector last September and has been adding about half a million customers a day, leveraging its free voice and data services. Mukesh Ambani-owned Jio entered the market with its Welcome Offer that provided free voice calling and data services along with a bouquet of Jio apps. The free services were extended in December to March 31, 2017, under the Happy New Year Offer. Jio's user base is around 80 million now. Vodafone India ended the December quarter with in 205 million customers.
The British telecom major reiterated that it was in talks to merge and deconsolidate its Indian unit, the country’s No. 2 telco, with Kumar Mangalam Birla-owned Idea Cellular, India’s third largest telco. The company said that if the transaction goes through, ‘it would result in Vodafone deconsolidating Vodafone India’. The merger talks, which entail Vodafone buying fresh shares of Idea, exclude the firm’s 42% stake in Indus Towers.
Although Vodafone India increased its overall customer base, it admitted to pressure on both prices and customer usage.
Vodafone India’s browsing revenue growth slowed to 0.6% from 16% in second quarter due to the impact of free services from Jio. “This drove a quarter-on-quarter decline in our active data customer base to 65.0 million (Q2: 69.6 million), mainly reflecting fewer 2G users,” said the firm in the statement.
Its 3G / 4G customer base declined quarter-on-quarter to 35 million. Voice revenue too fell 3% as the benefit of higher incoming volumes and a larger customer base was offset by lower usage per customer and a 4% year-on-year decline in voice prices.
Average revenue per user (ARPU) for December end quarter was Rs 158 compared with Rs171 in the previous quarter. When compared to the previous quarter, data usage per customer slowed to 15% and stood at 505 MB.
Vodafone India Q3 service revenue falls 1.9% on year; Reliance Jio, demonetisation hurt, Telecom News, ET Telecom
