Vodafone income dips 3.4% in June, service revenue growth improves

A man casts silhouette onto an electronic screen displaying logo of Vodafone India after a news conference to announce the half year results in Mumbai, India, November 10, 2015. Britain's Vodafone said on Tuesday it had started preparations to float its Indian unit as it reported a return to earnings growth for the group as a whole in the first half. REUTERS/Shailesh Andrade

Vodafone India has reported a 3.4 per cent dip in revenue to 1.57 billion pounds (around Rs 13,900 crore) for the three months to June- despite an over 22 per cent rise in data income- bogged down by fall in rupee and income due to regulations.

However, service revenue growth improved to 6.4 per cent as against 5.3 per cent in the previous quarter as voice revenue returned to growth and regulatory impacts came down, the London-based company said in a statement.

Data browsing revenue growth of 22.3 per cent is lower from the pace of prior quarters, reflecting lower customer growth, which it attributed mainly to the reversal of leap-year effect and lower intra-circle roaming revenues.

The company also said the preparations for its much-delayed initial public offer is still underway but did not offer a time-frame.

Excluding regulatory drags, including MTR cuts, roaming price caps and an increase in service tax, service revenue grew 7.7 per cent compared to 10.2 per cent in the fourth quarter of the prior fiscal year, the company said.

With effect from April 1, the company changed the reporting of certain dealer commissions in the country as a result organic service revenue growth for June quarter for the group and India have been amended to exclude the impact of this change, which had no effect on earnings or cash flows, the company said.

Its active data customer base increased to 69.7 million from 66.8 million a year ago and 3G/4G customer base grew to 32.3 million, up 46 per cent, and smartphone penetration in its four biggest urban circles touched 54 per cent.

Voice revenue returned to growth as competition eased, despite lower average minutes of use per customer. Total mobile customers rose 1.4 million giving a closing customer base of 199.4 million as of end June.

During the quarter, the company added 3,300 3G sites, taking the total to 59,000 and the population coverage to 96 per cent of target urban areas.

Currently, Vodafone has 9,700 4G sites with coverage of 45 per cent of its data revenue across five key circles and the company said it expects 4G coverage to increase to over 60 per cent of data revenues by the end of the year, well ahead of the upcoming spectrum auction.