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Vodafone Group announced its H1FY12 numbers yesterday. The results included key operating and financial
numbers for the Indian subsidiary. The key takeaways are:
• Muted revenue growth, in-line with peers but minutes growth better competition: Vodafone India’s local
currency voice revenue declined slightly – 0.1% on a sequential basis, due to a Minutes of Usage (MoU) per
subscriber decline of 3.5% and a 2.5% growth in the subscriber base. Note that Bharti’s voice revenue declined
0.9% sequentially, while Idea grew the same by 0.9%. In terms of traffic, however, minutes remained flat – this
contrasts the declining minutes trend that Idea and Bharti experienced ~ a 2% QoQ minutes fall each.
• Revenue growth driven by SMS: Rupee revenue for the Indian business grew 2.2% QoQ and 17.7% YoY, while
ARPM improved 2.1% QoQ. Note that ARPM improvement has come primarily because of a 44% QoQ growth in
SMS revenue, which, the management has attributed to implementation of SMS termination charges.
• Headline tariffs have been affected, competitive focus on promotional offers: Management has mentioned
that while the market remains competitive, effective rate per minute has stabilized with an increase taken by
operators on headline voice tariffs. So far 15% of the user base has migrated to the new tariff plan. The
management also added that competitive focus seems to have shifted to promotional offers.
On the subject of sustainability of tariff hikes by Indian operators, we noticed an interesting thing in Vodafone’s
commentary – there has been selective upward repricing in Europe too: UK saw prepaid price rise,
Netherlands – a reduction in data allowances, Italy – an increase in daily internet access charges, and Turkey – a
pass-through of regulatory fee! We feel that these bytes should allay concerns on the sustainability of prices hikes
on the premise that ‘voice tariffs haven’t been hiked anywhere else in the world.’
• New initiatives – sees opportunity in m-banking: The Company mentioned that it launched M-Pesa in India in
Q2FY12 (at a pilot stage in select Rajasthan villages – as per media sources). Specifically, it sees scope to target
~230mn unbanked mobile consumers in the country. This initiative is being spearheaded by Mr. Shridhar Rao,
who was earlier heading the company’s WB & Kolkata circles
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Vodafone Group announced its H1FY12 numbers yesterday. The results included key operating and financial
numbers for the Indian subsidiary. The key takeaways are:
• Muted revenue growth, in-line with peers but minutes growth better competition: Vodafone India’s local
currency voice revenue declined slightly – 0.1% on a sequential basis, due to a Minutes of Usage (MoU) per
subscriber decline of 3.5% and a 2.5% growth in the subscriber base. Note that Bharti’s voice revenue declined
0.9% sequentially, while Idea grew the same by 0.9%. In terms of traffic, however, minutes remained flat – this
contrasts the declining minutes trend that Idea and Bharti experienced ~ a 2% QoQ minutes fall each.
• Revenue growth driven by SMS: Rupee revenue for the Indian business grew 2.2% QoQ and 17.7% YoY, while
ARPM improved 2.1% QoQ. Note that ARPM improvement has come primarily because of a 44% QoQ growth in
SMS revenue, which, the management has attributed to implementation of SMS termination charges.
• Headline tariffs have been affected, competitive focus on promotional offers: Management has mentioned
that while the market remains competitive, effective rate per minute has stabilized with an increase taken by
operators on headline voice tariffs. So far 15% of the user base has migrated to the new tariff plan. The
management also added that competitive focus seems to have shifted to promotional offers.
On the subject of sustainability of tariff hikes by Indian operators, we noticed an interesting thing in Vodafone’s
commentary – there has been selective upward repricing in Europe too: UK saw prepaid price rise,
Netherlands – a reduction in data allowances, Italy – an increase in daily internet access charges, and Turkey – a
pass-through of regulatory fee! We feel that these bytes should allay concerns on the sustainability of prices hikes
on the premise that ‘voice tariffs haven’t been hiked anywhere else in the world.’
• New initiatives – sees opportunity in m-banking: The Company mentioned that it launched M-Pesa in India in
Q2FY12 (at a pilot stage in select Rajasthan villages – as per media sources). Specifically, it sees scope to target
~230mn unbanked mobile consumers in the country. This initiative is being spearheaded by Mr. Shridhar Rao,
who was earlier heading the company’s WB & Kolkata circles
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