Vodafone India H1-FY’14 revenue up 13.5% at Rs18, 481 crore

Vodafone India has reported a 41 per cent growth in operating free cash flow (OFCF) at Rs4,771 crore for the six months of the current financial year ended 30 September 2013, against Rs3,378 crore in the same period in the previous year.

Service revenue was up 13.5 per cent at Rs18,481 crore from Rs16,283 crore in the previous-year period.

According to the company, revenue performance was driven by hardening of price, strong growth in voice minutes and data revenues.

Vodafone India posted EBITDA (earnings before interest, tax, depreciation and amortisation) of Rs6,519 crore, against Rs4,993 crore, up 30.6 per cent. The company had capital expenditure of Rs1,909 crore, against Rs1,705 crore in the year-ago period, up 12 per cent.

According to the telco, its data (browsing) revenue shot up 76.5 per cent to Rs1,542 crore from Rs874 crore. Browsing revenues now make up 9 per cent of the company's service revenue.

Increasing smart phone penetration had driven up data usage and revenue growth to 10.7 per cent of the total base.

Marten Pieters, managing director and CEO of Vodafone India, said Vodafone continued to show a healthy revenue growth driven by price hardening, an exponential growth in data and a solid subscriber base. The company's focus on profitable growth had led to a strong margin improvement and a strong operating free cash flow, he added.

Meanwhile, Vodafone Group Plc, the second-largest wireless company, plans to plough back billions to improve its network, in a bid to reverse service-sales declines that fell below estimates of analysts, Bloomberg reports.

Vodafone said yesterday that investments in `Project Spring,' the network-improvement project announced in September, would expand to £7 billion by March 2016, a year ahead of schedule, and £1 billion extra, the report said.

According to commentators, CEO Vittorio Colao was betting that the company could benefit from investing ahead of a recovery in European markets, as it seeks to expand the reach of faster mobile and fibre broadband services.

Including Project Spring, Vodafone would spend over £19 billion on its network by 2016, Colao said in a conference call yesterday. A report from Moody's Investors Service said it might be difficult for competitors to keep pace with the Newbury, England-based company's spending.

Bloomberg quoted Carlos Winzer, senior vice president of corporate finance at Moody's, as saying the clear, underlying message was that most companies in Europe were going to have to step up their capex in order to accelerate convergence to set off the challenges coming from Vodafone.