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Vodafone India 2Q/1HFY12 results – key takeaways. Key takeaways from Vodafone
India’s 2Q/1HFY12 earnings report – (1) 2.7% qoq revenue growth in 2QFY12, stronger
than both Bharti as well as Idea, (2) steady hoh EBITDA margin at a shade over 25% for
1HFY12, (3) 2%+ qoq uptick in RPM, (4) flat network traffic qoq versus a decline
reported by both Bharti and Idea, (5) sustained strong non-SMS non-voice revenue
growth – at odds with Bharti, and (6) 27.5 mn data users versus 31 mn for Bharti.
Vodafone India 2Q/1HFY12 financials – key takeaways
Vodafone reported 2.7% qoq and 20.1% growth in its India revenues (including Indus
contribution) to Rs78 bn. Sequential growth rate for the quarter was higher than both Bharti
(which reported a decline in its India wireless revenues) as well as Idea.
Revenue growth was led by a 2.6% qoq uptick in RPM. Network traffic remained flat qoq – this
is again better than the 2% qoq decline in minutes reported by both Bharti and Idea.
Vodafone indicated that gross revenues got a kicker from 3G ICR revenues as well as
introduction of termination charges for SMS. We note that SMS termination charge was
not indicated as a revenue growth factor by either Bharti or Vodafone. Vodafone’s disclosures
suggest that it contributed meaningfully – we compute around 180-200 bps kicker to revenue
growth as well as RPM uptick on this count. Adjusted for SMS termination and ICR revenues,
RPM was likely flat to up marginally on a sequential basis.
Interestingly, Vodafone indicated that nearly 15% of its subscriber base is on recently
revised higher base tariffs as of end-Sep 2011. This has not translated into RPM uptick
during the quarter – we believe that a bulk of these 15% subs moved to higher base
levels only towards the end of the quarter and hence, 3QFY12E would see the real
flow-through impact of higher base tariffs.
Vodafone’s non-voice revenues (SMS + VAS + data) increased a strong 17.3% qoq. Bulk of this
increase was driven by a strong 44.7% qoq growth in SMS revenues, driven by SMS
termination revenues. Nonetheless, unlike Bharti, which reported a sharp 12.2% qoq decline in
non-SMS non-voice revenues for the quarter, Vodafone reported a 3.4% increase. We had
highlighted Vodafone’s surprising leadership on non-SMS non-voice revenues versus Bharti in
our Bharti 2Q earnings review. The gap has only increased in the Sep 2011 quarter.
Vodafone indicated 27.5 mn mobile data users (19% of subs, +142% yoy) versus 31 mn
for Bharti. Bharti’s 28% lower non-SMS non-voice revenues versus Vodafone despite
almost 13% higher mobile internet user base clearly suggests substantially higher data
usage among Vodafone’s subs versus Bharti’s – this has definitely surprised us.
EBITDA margin for 1HFY12 was 25.3%, a 20 bps uptick hoh from 2HFY11 levels.
ARPU for the quarter was Rs168, down a marginal 0.6% qoq.
In line with Bharti and Idea, Vodafone reported a sharp increase in churn as well. Blended
monthly churn went up to 5.3% from 4.7%. This has been another metric that has been a tad
disappointing and at odds with the thesis of reducing competitive intensity in the market.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Telecom
India
Vodafone India 2Q/1HFY12 results – key takeaways. Key takeaways from Vodafone
India’s 2Q/1HFY12 earnings report – (1) 2.7% qoq revenue growth in 2QFY12, stronger
than both Bharti as well as Idea, (2) steady hoh EBITDA margin at a shade over 25% for
1HFY12, (3) 2%+ qoq uptick in RPM, (4) flat network traffic qoq versus a decline
reported by both Bharti and Idea, (5) sustained strong non-SMS non-voice revenue
growth – at odds with Bharti, and (6) 27.5 mn data users versus 31 mn for Bharti.
Vodafone India 2Q/1HFY12 financials – key takeaways
Vodafone reported 2.7% qoq and 20.1% growth in its India revenues (including Indus
contribution) to Rs78 bn. Sequential growth rate for the quarter was higher than both Bharti
(which reported a decline in its India wireless revenues) as well as Idea.
Revenue growth was led by a 2.6% qoq uptick in RPM. Network traffic remained flat qoq – this
is again better than the 2% qoq decline in minutes reported by both Bharti and Idea.
Vodafone indicated that gross revenues got a kicker from 3G ICR revenues as well as
introduction of termination charges for SMS. We note that SMS termination charge was
not indicated as a revenue growth factor by either Bharti or Vodafone. Vodafone’s disclosures
suggest that it contributed meaningfully – we compute around 180-200 bps kicker to revenue
growth as well as RPM uptick on this count. Adjusted for SMS termination and ICR revenues,
RPM was likely flat to up marginally on a sequential basis.
Interestingly, Vodafone indicated that nearly 15% of its subscriber base is on recently
revised higher base tariffs as of end-Sep 2011. This has not translated into RPM uptick
during the quarter – we believe that a bulk of these 15% subs moved to higher base
levels only towards the end of the quarter and hence, 3QFY12E would see the real
flow-through impact of higher base tariffs.
Vodafone’s non-voice revenues (SMS + VAS + data) increased a strong 17.3% qoq. Bulk of this
increase was driven by a strong 44.7% qoq growth in SMS revenues, driven by SMS
termination revenues. Nonetheless, unlike Bharti, which reported a sharp 12.2% qoq decline in
non-SMS non-voice revenues for the quarter, Vodafone reported a 3.4% increase. We had
highlighted Vodafone’s surprising leadership on non-SMS non-voice revenues versus Bharti in
our Bharti 2Q earnings review. The gap has only increased in the Sep 2011 quarter.
Vodafone indicated 27.5 mn mobile data users (19% of subs, +142% yoy) versus 31 mn
for Bharti. Bharti’s 28% lower non-SMS non-voice revenues versus Vodafone despite
almost 13% higher mobile internet user base clearly suggests substantially higher data
usage among Vodafone’s subs versus Bharti’s – this has definitely surprised us.
EBITDA margin for 1HFY12 was 25.3%, a 20 bps uptick hoh from 2HFY11 levels.
ARPU for the quarter was Rs168, down a marginal 0.6% qoq.
In line with Bharti and Idea, Vodafone reported a sharp increase in churn as well. Blended
monthly churn went up to 5.3% from 4.7%. This has been another metric that has been a tad
disappointing and at odds with the thesis of reducing competitive intensity in the market.
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