Vodafone posts first year of net profits in India

At the results conference in New Delhi, Vodafone India's chief financial officer, Thomas Reisten said the company had posted net profits in 2013/14, the first time in a fiscal since it entered India in 2007. However, he did not disclose the exact number. Vodafone is not listed in India and it isn't mandatory for it to disclose certain numbers.

The company posted revenues of Rs 37,606 crore (13 per cent annual growth) and earnings before interest, taxes, depreciation, and amortization (EBITDA) of Rs 13,399 crore (26 per cent growth). This was on account of new customer acquisitions, growth in data services and higher usage of voice minutes, said Marten Pieters, Managing Director and CEO of Vodafone India at the conference.

The most notable development was the growth in data revenue and data customers. Even though Vodafone trails Bharti Airtel, India's largest telecom company, in terms of data subscribers, data revenue, average revenue per minute coming from data and total data minutes consumed, the company showed a fair bit of improvement compared to 2012/13.

"It is difficult if you wanted to compare it with other companies," said Pieters. "Nobody has the footprint that we have. We are not present (with 3G) in Bangalore where there are heavy data users." Vodafone has 3G spectrum only in nine out of 22 circles.

Data browsing revenue grew by 72 per cent to Rs 3,437 crore, amounting to 10.7 per cent of Vodafone's overall services revenue. Data volume grew by 125 per cent, smartphone devices on its network grew by 136 per cent, and 3G was 40 per cent of its total data volume.

After the stake sale in US-based telecom operator Verizon, a part of the money-Rs 7,000 crore-is being used in as capital expenses. Reisten said that the maximum amount (of that money) will be used on data growth,- rolling out sites and making the networks data ready.

The company also introduced price cuts end of last year to drive adoption-80 per cent cut in 2G rates, and over 95 per cent reduction in international roaming rates. The action had a huge impact on the Vodafone's data revenue, admits Pieters. "We have digested those price cuts. It will overtime increase the use of data," he said.

In the February spectrum auction, Vodafone also bagged 1800 MHz spectrum which it will use to launch 4G services over LTE technology, though it's too early for India considering 3G services is just picking up. "We want to be ready for that technology in the future, but we have a long way to go with 3G services," concluded Pieters.