Vodafone Essar, reported Operating Profit at Rs 110 crore for the First Time in India

India’s second largest GSM operator, Vodafone Essar, reported an operating profit for the first time since its operations in India at Rs 110 crore (£15 million) for the year ended 31 March 2011. In 2010 operating losses stood at Rs 272.2 crore (£37 million). Vodafone started its operations in India four years ago when it acquired Hutchison Telecommunications' 67% stake in the Indian firm Hutch-Essar.

Vodafone’s revenues for the year ended 31 March 2011 increased 16.2% on account of increased mobile customer base and a more stable pricing environment towards the end of the year. For the year ended 31 March 2011, its revenues increased to Rs 28368.9 crore (£3.85 billion) compared to R22915.9 crore (£3.11 billion) for the year ended 31 March 2010.

Service revenue grew by 16.2% including a 1.7% benefit from Indus Towers, which is the group’s telecom tower joint venture with Bharti Airtel and Idea Cellular. Growth was primarily driven by a 39% increase in the average mobile customer base and stable usage per customer trends.

Vodafone added 10.3 million new subscribers to reach 134.5 million subscriber base with an annualised churn of 50.9%. The company also generated 119295 million minutes on the network with blended average revenue per user (Arpu) of Rs 171.

Its pre-paid subscriber base (which is 95.3% of its total base) has an Arpu of Rs 142 and post-paid subscribers contribute an Arpu of Rs 728 per month.

Vodafone launched its 3G services in February 2011 following the purchase of 3G spectrum in May 2010 and subsequently rolling out the network. The company roped in 1.5 million 3G customers.
On 30 March 2011, the Essar group exercised its underwritten put option over 22% of Vodafone Essar following which, on 31 March 2011, the group exercised its call option over the remaining 11% stake owned by the Essar group.