Vodafone India - KPIs in line with peers - Ambita

In 3QFY13, Vodafone India's revenues increased by 13.5% QoQ to Rs97.9bn. The revenues were overstated, owing to the inclusion of active income (power and fuel reimbursements) received by Indus Towers in total revenues for the first time. Adjusting for the same, revenues increased by 2.5% QoQ led by a strong growth in VAS revenues. Revenues from messaging and data increased by 13.8% QoQ and 10.5% QoQ, respectively, whilst voice revenues increased by 1.4% QoQ.

KPIs: Similar to Bharti and Idea's 3Q results, Vodafone's voice revenue growth was largely led by the return of network traffic after a seasonal low in 2QFY13 and a marginally lower ARPM. Network minutes increased by 2.7% QoQ whilst ARPM declined by 0.3% QoQ. ARPU increased by 4.6% QoQ to Rs182. MoU increased by 4.9% QoQ to 329 minutes aided by higher traffic growth and lower subscriber base. The subscriber base declined by 3.4% QoQ, owing to the DoT's new subscriber acquisition norms. This impacted gross additions and led to the purge of inactive users. The full impact was diluted by the reduction in churn.

Key takeaways: As mentioned earlier, Vodafone's results were in line with those of the other incumbents that have already reported their results so far. Network traffic returned and reflected in revenue growth despite marginally lower ARPMs. We expect the full impact of discount reduction on special tariff packs to reflect in higher ARPMs starting from 4QFY13, given that the exercise started in December 2012. The impact of the new subscriber addition norms has been similar across the incumbents – lower gross additions and reduced churn. VAS revenues of Vodafone and Bharti increased by 11% QoQ and 6% QoQ, respectively, but Idea's VAS revenues declined by 2.5% QoQ. This could be due to Idea being less prepared for the new DoT VAS norms as compared to the other two companies.

Source : Equity Bulls

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