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Vodafone India’s Q4FY18 revenue falls by 21.2%; Group CEO Colao to depart

Vodafone’s revenue in India fell by 21.2% in Q4FY18, making it the multinational company’s only key market to record a fall. On an yearly basis, service revenue for India fell by 18.9% to Rs 34,855 crores in FY18. The reduction in revenue is in line with industry trends, and Vodafone cited reduction in interconnect usage charge, international termination charge and continuing suppressed pricing in the industry, as the causes for it.

For the financial year, EBITDA for Vodafone India was Rs 7,766 crores. Adjusted EBITDA declined by 34.5% in FY18, with a 5.2 percentage point deterioration in adjusted EBITDA margin to 22.1%. “The impact of lower revenues was partially offset by significant actions to lower our operating cost base, as well as the benefit of a provision release in the fourth quarter following positive legal judgements,” Vodafone said.

Another performance indicator, ARPU (Average Revenue Per User) for Q4FY18 was at Rs 119, as consumption patterns shift to deeply discounted bundled plans. Competitor Airtel has reported an ARPU of Rs 116 in the last quarter. In its Q3FY18 results, Vodafone India also reported decline in ARPU by 28% QoQ.

During the year, the company continued to invest in network quality, with a capital expenditure/sales ratio of 20.4%. It added 48,500 sites in the year. As a result of its Capex, Vodafone claims it can carry 4.5x more data traffic than last year.

User metrics

Vodafone India added 14 million customers in the last quarter of financial year 2018 (Q4FY18), taking its user base to 223 million, which is a growth of 6.5% year-on-year, the company revealed in its earnings report today. This is in part due to exit of smaller players from the market. Of the total, nearly 120 million customers are from rural parts.

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Data usage also saw a big jump over the past year, recording a growth of 350% in FY18 over FY17. Data usage growth in Q4FY18 was 523% YoY. Vodafone said that it now had 76 million data users, of which 53.5 million used at least 1 MB of data or more (A very low threshold). It added 22 million broadband users in the year, closing at 59.8 million 3G/4G subscribers. Higher smartphone penetration at over 40% of total customer base(Mar’18 exit), is another reason for more data use.

Leadership change

In a surprising announcement, Vodafone Group announced that its CEO Vittorio Colao will step down from his position starting October 2018, and will be succeeded by Nick Read. Read currently holds the position of Group Chief Financial Officer at Vodafone.

Further, the CFO position vacated by Read will be taken over the current Deputy CFO Margherita Della Valle. Valle will also join the company’s board.

The announcement comes days after Vodafone locked the takeover of Liberty Global’s German and eastern European cable companies for €18bn, and on the heals of the Idea merger in India. “Now is the right time to begin the transition,” Colao was quoted as saying by Bloomberg.


The merger of Idea and Vodafone India, which was announced in March 2017, is set to be completed by June 2018. It has been approved by the Competition Commission of India, the shareholders and creditors of both Idea and Vodafone India, and the relevant National Company Law Tribunals. Foreign investment and Department of Telecommunications approvals are currently pending.

Further, the merger of Vodafone’s Indus Towers with Bharti Infratel, which was announced in April, will given Vodafone 783.1m new shares in the combined company. According to CEO Colao, this deal will allow Vodafone to own a significant controlling stake in India’s largest listed tower company.

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Vodafone’s sale of its standalone tower business in India, finalised in March, for nearly Rs 40 billion is also set to be completed by the first half of this calendar year.

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