Mumbai: Fierce competition from Jio coupled with the impact of the goods and services tax (GST) pinched Vodafone India during the first half of this fiscal. The country's second largest telecom operator reported a 39.2 per cent drop in operating profit at Rs 4,075 crore for the period ended September 30.
Vodafone India also saw a 15.8 per cent drop in service revenues which came to Rs 19,002 crore during the period.
The company, which is set to merge with the third largest player Idea Cellular, had posted Rs 22,579 crore in revenues and had an operating profit of Rs 6,704 crore in the year-ago period.
Vodafone said the drop in service revenues and operating profit was because of the price competition from Jio and incumbents, seasonality and the implementation of the GST.
Its numbers, however, mirror the fate of its peers. On Monday, Idea Cellular reported higher standalone net losses which came in at Rs 1,176 crore for the September quarter compared with a profit of Rs 43 crore in the same period of last year.
Total revenues of the AV Birla group firm had also declined to Rs 7,465 crore from Rs 9,300 crore in the corresponding period of last year. Idea had also attributed the disappointing performance to pricing pressure from Jio and the higher GST.
Late last month, Bharti Airtel had reported its sixth straight quarter drop in profits as its consolidated net profit plunged almost 77 per cent to Rs 343 crore.
However, Sunil Sood, managing director & CEO, of Vodafone India, was optimistic on the road ahead.
"We see signs of positive developments with consolidation of smaller operators,'' he said while adding that despite intense competition, Vodafone India had recorded a gain of 60 basis points in revenue market share during the first quarter and had delivered a stable performance overall.
"We are making good progress in securing requisite approvals for our merger with Idea Cellular and in monetising our tower assets," he said.
During the period, Vodafone India also witnessed a strong growth in data use with 67.7 million users.