Vodafone India Posts Net Profit After 7 Yrs

Things are finally getting brighter in the Indian telecom industry after years of turmoil.

India’s second largest mobile services provider, Vodafone India has posted the first year of net profits after being in the country for seven years. During FY2014, the company posted revenues of Rs 37,606 crore (an increase of 13 per cent) and earnings before interest, taxes, depreciation, and amortization (EBITDA) of Rs 13,399 crore (up 26 per cent). EBITDA margins too have risen 3.1 percentage points to 31.8 per cent.

Since Vodafone is not listed in India, the exact profit numbers were not released. However, India is now the third largest contributor to Vodafone’s revenues and operating cash flow. The leading two markets are Germany and the United Kingdom. While Germany accounts for 19.1 per cent of Vodafone revenues, UK accounts for 14.7 per cent and India 10.1 per cent.

As the demand for data services in India increased, Vodafone has seen data browsing revenues rise 72 per cent to Rs 3,436.9 crore, accounting for 10.7 per cent of overall revenues. It currently has 52 million data users (31.2 per cent of the base) of which 7 million are 3G users. 

During the year, Vodafone sold off its stake in Verizon Wireless in the US for $ 130 billion. It will use a part of that money as capex during the year in India. It is estimated to spend Rs 7,000 crore on capex in India over the next couple of years, primarily to enhance the data network.

As tariffs were hiked during the year, average revenues per user (ARPU) rose to Rs 199 from Rs 183 a year ago. The average revenue per minute too has risen 6.2 per cent from 44.3 paise in the last fiscal to 47 paise now.