Vodafone to Use ‘Disciplined Approach’ to Expand 4G Footprint in India

Vodafone is not looking at an aggressive strategy to expand its 4G footprint in India, at a time when Mukesh Ambani-owned Reliance Jio is gearing up to start operations. The company is taking a ‘disciplined approach’ on investing in 4G expansion and will exercise caution while investing in the upcoming spectrum auction, Vodafone said, as part of its earnings announcement.

Vodafone had 199.4 million customers in India at the end of first quarter. The company launched 4G services in five circles and expects to cover 60 percent of data revenues in these circles by the end of the financial year. The company disclosed that the average data consumed stood at 850 MB per customer per month.

Vodafone India’s Performance

Vodafone’s India revenues grew by 6.4 percent to €1,519 million despite a lower average minutes of use per customer.

About 1.4 percent was shaved off from India revenue due to fall in mobile termination rates, roaming price caps and higher service tax. Intra-circle revenue slipped in the first quarter, Vodafone disclosed in its investor presentation.

Vodafone India’s data revenue growth slowed to 22 percent in the first quarter against a growth of 35 percent in the fourth quarter.

Voice revenue after remaining flat in fourth quarter rose by 2.2 percent in the first quarter, despite fall in minutes of usage. Blended average revenue per user (ARPUs) fell marginally to Rs 176 per user against Rs 177 in the fourth quarter.

It disclosed that 3G coverage in selected urban centres grew sequentially by 1 percent to 96 percent. Call drop ratio declined to 0.70 percent as against 0.86 percent at the end of March quarter.

Vodafone witnessed increase in churn in the quarter. The churn rate increased to 55.8 percent from 49.7 percent at the end of March quarter.

Preparations are on for a potential initial public offering for its India arm, Vodafone said.