Voda revenue up 13%, but posts loss

Vodafone, India’s second largest telecom operator by subscribers, cl­aimed that it posted net loss in its operations in the first six months ended September 30.

Company officials du­cked questions to quantify the losses or provide more details on the financials.

All that Vodafone India was willing to share was the revenue growth figure, which stood at Rs 17,581.30 crore, up 13.3 per cent from Rs 15,511.6 crore that the company had posted in the same period a year ago.

Vodafone India MD and CEO Marten Pieters attributed the losses from India operations to the company having started “a serious investment cycle in India over the past five years.”

Pieters said the company had gone from 30 million customers to over 150 million, added close to 19,000 cell sites and rolled out networks in rural areas. He said this was part of the company’s “long-term commitment” to India. Vodafone acquired Hutchison Essar’s telecom network in India in 2007.

Vodafone India’s earnings before interest, tax, depreciation and amortisation (Ebitda) increased to Rs 4,993 crore from Rs 3,963.8 crore over the same period last year. The company also claimed an improvement in margins to 28.4 per cent from 25.6 per cent, marking an increase of 280 percentage points.

Vodafone India chief financial officer (CFO) Colman Deegan said the improvement in margins was possible due to “strong revenue growth, lower acquisition costs and increased focus on operational efficiencies.”

Deegan claimed “strong growth in data services” and said that the company had 32 million data users at the end of the first half of the financial year, all of which were “active users.” Of this, 2.1 million were 3G data consumers. Vodafone India’s capital expenditure declined 29.7 per cent to Rs 1,704.7 crore from Rs 2,426.1 crore for the same period last year, owing to the economic slowdown and what the company described as “uncertain regulatory outlook”.Pieters said that the recent decisions of the government made the regulatory environment more certain going forward. He said it would be difficult for Vodafone India to go for an IPO in the “face of regulatory uncertainty around spectrum allocation, pricing and, more specifically, licence extension.”Pieters criticised the government for talking of a level-playing field for all operators, when it has excluded state operators like MTNL and BSNL from one-time fees. Of the approximately Rs 31,000 crore that the government hopes to garner as one-time fees, PSU companies will owe the government between Rs 17,000 crore and Rs 19,000 crore.“BSNL and MTNL have a lot of spectrum and they don’t use it very efficiently. Also, if I have to pay thousands of crores in spectrum fee, while the competitor doesn’t, to me that’s not a level-playing field. There have to be same rules,” he added.Vodafone reported a bad first half not only in India, but also rest of the world. In global results declared on Tuesday, Europe’s economic woes hit Vodafone Group with £1.9 billion ($3 billion) loss that included £5.9 billion write-down of its networks in Italy and Spain. This was in stark contrast to the company’s £6.6 billion profit last year.Vodafone Group faces a tax liability of approximately Rs 12,000 crore in India over its acquisition of Hutchison Essar in 2007. However, in its results declared on Tuesday, the company decided against making a $2.2 billion provision against the tax bill.sriramshankar@mydigitalfc.com


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