Price war and GST pull Vodafone India operating profit down by 39%

Vodafone India, one of the leading total telecommunication service providers in the country, reported a 39 per cent decline in its operating profit for the first half of financial year ended September 30, 2017. The company’s service revenue stood at Rs 19,002 crore, down by 15.8 per cent from Rs 22,579 crore during the corresponding period last year.

Vodafone attributed the fall in revenues and operating to continued price competition from a new operator and incumbents, seasonality and GST.

The company’s EBITDA margin shrunk to 21.4 per cent from 29.6 per cent and stood at Rs 4,075 crore in H1 FY18 against 6,704 crore in H1 FY17.

Commenting on the results, Sunil Sood, Managing Director and CEO, Vodafone India, said, “Amid continuing intense competition, we recorded a gain of 0.6ppt in RMS in Q1FY18 (YoY) and delivered a stable performance overall. We see signs of positive developments with consolidation of smaller operators. We are making good progress in securing requisite approvals for our merger with Idea Cellular and in monetising our tower assets. We remain committed to playing our due role in enabling Digital India by fulfilling the evolving needs of increasing volumes, speed and connectivity solutions from both retail and enterprise customers.”

On the earlier announced merger with Idea Cellular, Vodafone said it is on track and is expected to complete in calendar year 2018. During the quarter, approvals were received from (a) ‘Competition Commission of India’ (CCI) and (b) SEBI & Stock Exchanges.  

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