Vodafone records maiden profit in India

NEW DELHI: Nearly seven years after it set foot in India, British telecom giant Vodafone’s operations here have registered a net profit at a time when the company looks at an aggressive expansion in the market.

The company, that entered India in 2007 after buying out the stake of Hutchison Whampoa, said it expected profitability to get stronger in the coming years as data growth remains strong and voice tariffs go up.

“We have turned net profitable for the first time indeed,” Vodafone India MD & CEO Marten Pieters said. However, he did not share the absolute numbers.
Vodafone, the country’s second-biggest operator behind only Bharti Airtel, said service revenues in the financial year ending March 31, 2014, grew by 13% at Rs 37,606 crore against Rs 33,282 crore in the previous fiscal. The company registered a 3% growth in EBITDA margins which stood at 32% (Rs 13,399 crore).

Vodafone, that has a subscriber base of 16.6 crore, has invested close to Rs 48,200 crore in India over the last five years.

Pieters said that browsing revenues had grown by 72% on its data customer base of 5.2 crore users, including 70 lakh 3G customers.

On the voice front, he said that there is a case for tariffs to go up. However, Pieters did not comment on whether changes will be made to headline tariffs. Reducing discounting and freebies would be one of the ways to boost voice realizations.

On mergers and acquisitions, Vodafone said it is open to engaging in deals. “But these come with hassles, and debt. This makes it difficult for us to make any headway in M&As.”

Pieters said that the company is awaiting the policy related to spectrum sharing and trading which could be a better option to M&As.

On expectations from the new government, he said that it should work towards making fresh spectrum available in the market. Also, the levies and taxes on the telecom companies should be reduced.