Vodafone India Q1 service revenue grows 7% to Rs 11,216 cr

Dip in revenue mainly due to reduction in interconnect charges from 20 paise to 14 paise per minute

Vodafone India’s services revenue rose to £1.13 billion (Rs 11,216 crore) in the April-June period of 2015-16, up 6.9 per cent from the same period last year. On a quarterly basis, however, the growth lagged behind a 11.7 per cent increase in the January-March quarter as a dip in realisations from voice calls dragged down earnings.

Telecom operators with a large customer base make money when calls are made to their network from other operators. Vodafone, which is the second-biggest telecom operator in terms of number of subscribers, witnessed a 17.6 per cent drop in incoming call and message revenue as the mobile termination rate (MTR) or the interconnect charge was reduced to 14 paise per minute from an earlier provision of 20 paise a minute.

“Excluding MTRs, service revenue grew 10.6 per cent, compared with 13.2 per cent growth in January-March, with continued customer base growth and acceleration in the take-up of 3G offsetting continued pressure on voice pricing,” Vodafone said.

At around seven per cent year-on-year revenue growth, Vodafone's performance was poorer than the 16.4 per cent revenue growth reported by Idea Cellular, the third-biggest operator in the country. Idea had an impact of Rs 317 crore on gross revenue due to reduction in interconnect charges.

Bharti Airtel, India’s largest telecom service provider, will come out with the results on August 4. Vodafone India said slower realisation from voice services was offset by increased revenue from data services. In the three-month period, its data revenue grew 65 per cent, aided by addition of 3.1 million data consumers (2G and 3G). It now has 22 million 3G data consumers, compared with 10 million a year ago and higher than 16.7 million 3G customers of Idea Cellular.

In the April-June period, subscriber base grew at 0.8 per cent with net addition of 1.6 million customers, taking total customers to 185.4 million. In the same period, Airtel added 4.62 million customers, a growth of 1.8 per cent, while Idea’s net addition was 4.2 million consumers, with the highest growth rate of 2.7 per cent among large players. To bring in more customers for data services, Vodafone India added 1,000 2G sites and 1,100 3G sites in the quarter and has started testing 4G network in selected service areas. Its mobile wallet service M-pesa now has 501,000 active customers supported by 94,000 agents, the firm said.