REUTERS - Vodafone Group PLC's India unit reported a 39 percent fall in operating profit for the first half of this fiscal year, hurt by a bruising price war started by an upstart rival and a new nationwide sales tax.
Earnings before interest, tax, depreciation and amortisation (EBITDA) fell to 40.75 billion rupees ($622.26 million) in the half year ended Sept. 30, from 67.04 billion rupees a year earlier, Vodafone India, the country's No.2 telecom operator, said in a statement on Tuesday.
EBITDA margin shrunk to 21.4 percent from 29.6 percent, while service revenue dropped about 16 percent to 190.02 billion rupees.
Reliance Jio Infocomm, a telecom venture controlled by billionaire Mukesh Ambani, entered the market late last year with free voice and cut-price data, forcing incumbent carriers to drop prices even though their margins took a hit.
The competition drove small carriers out of business and also sparked off consolidation in the sector.
Vodafone India and Idea Cellular Ltd, India's third-biggest wireless carrier, are to merge operations, potentially creating the country's biggest telecom player.
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On Monday, Vodafone India agreed to sell its standalone tower business to American Tower Corp for 38.5 billion rupees.
($1 = 65.4875 Indian rupees)
(Reporting by Krishna V Kurup in Bengaluru; Editing by Subhranshu Sahu)