Financial performance

Vodafone Essar, which was acquired in May 2007, achieved revenue of £1,178 million (Rs8,364 crore), growing by 41 per cent, assuming the group owned the business for the first half of the year.

Growth on this basis in the second quarter was 36 per cent compared with 46 per cent in the first quarter, with around five percentage points of the decline in growth rate being a result of market driven cuts and the balance attributable to a higher revenue base in the second quarter of the prior period.

Net customer additions were 10.5 million, bringing the closing customer base to 54.6 million, an increase of 53.2 per cent in comparison to the same date last year, and was achieved despite the increasingly competitive environment. Customer penetration in the Indian mobile market reached 27 per cent at 30 September 2008.

Adjusted operating profit was £7 million (Rs49 crore). Customer costs increased at a lower rate than revenue, benefiting from economies of scale. Licensing costs increased as discounts received from the regulator in some service areas have 17 been terminated.

Network expansion continued, with an average of 2,000 base stations constructed per month during the period, including in new service areas, while site sharing increased and the joint venture, Indus Towers, launched and steadily increased its operations.