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Vodafone disconnects India IPO plan for now

Revenue growth faster than Bharti?s domestic biz

Read more on:    Ipo | Vodafone India | Marten Pieters | Bharti Airtel
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The Initial Public Offer () of is set to remain in the freezer for some more time. , managing director and chief executive officer of Vodafone India, said the company may not launch an IPO this year, if the government accepted the recommendations of the telecom regulator on spectrum auctions.

“If the Trai recommendations go through, there might be many spectrum auctions in the year. It is unlikely that we can go for an initial public offer in the middle of so many spectrum auctions,” he said. The regulator’s recommendations on a high base price for auction, re-distribution of spectrum, etc, have been criticised by other telecom operators as well.

Pieters said the recommendations were completely out of line. Commenting on the Trai proposal to refarm spectrum, he said it was an illusion to think the practice could be replicated in India. “The recommendations can impact tariffs in cities like Mumbai and Delhi by Rs 1 per minute,” he said. He was addressing a press conference to announce Vodafone India’s financial numbers for the first time.

The company on Tuesday posted a 19.5 per cent increase in its service revenues to Rs 32,184 crore for the year 2011-12, as compared to Rs 26,936 crore a year ago. That was driven by an increase in the customer base, strong growth in voice minutes and data revenues. The growth was faster than that achieved by industry leader for its India and South Asia business. Bharti’s revenues from its domestic business grew 11.56 per cent to Rs 51,893 crore in the same period.

Vodafone's revenue per minute stood at 44 paise, comparable to Bharti Airtel’s 43.8 paise. The Ebitda margins of Vodafone India improved by 0.5 per cent to 26.3 as compared to the previous year. It was in sharp contrast to Airtel, whose Ebitda margins went down 0.5 per cent from the previous year. But, they were much higher at 33.2 per cent. Idea Cellular improved its margins by 1.2 per cent for the year at 22.9 per cent.

Vodafone’s average revenue per user or ARPU for the fourth quarter stood at Rs 180, lower than Airtel’s 189. Vodafone said its ARPU was driven by a better quality of customers and minutes of usage. “We have the largest post-paid customer base at 7.5 million,” said Pieters. He also said their new circles had performed well and the company had more than 10 per cent revenue market share in four of seven circles.

Even as the India business has posted an adjusted operating profit of 60 million pounds or Rs 521crore for the year, the business is yet to make profits on a net basis, according to Pieters. He did not give any forecast on when they can reach profits.

The India business showed an 11.8 per cent increase in the customer base, strong growth in incoming and outgoing voice minutes and 51.3 per cent growth in data revenue. “Our data users grew 81.5 per cent to 35.4 million,” said Colman Deegan, chief finance officer.

PEER COMPARISON
  Net sales (Rs crore) PBIDT (Rs crore)
Full year ended Mar ‘11 Mar ‘12 YoY chg Mar ‘11 Mar ‘12 YoY chg
Bharti Airtel 59,538.30 71,450.80 20.01% 20,066.10 23,704.90 18.13%
Idea Cellular 15,438.40 19,488.68 26.24% 3,790.66 5,092.34 34.34%
Vodafone 26,937.00 32,184.00 19.50% 7,030.00 8,549.00 21.60%
For Vodafone, sales figures are service revenues and PBIDT figures are Ebitda; Vodafone did not disclose PAT (profit after tax)
Compiled by BS Research Bureau 
                                                                                                                            Source: Capitaline

Vodafone India's free cash flows also grew to Rs 4,241 crore for the year, on a consistent capital expenditure and a strong working capital performance. The company's net debt stood at Rs 30,000 crore.

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