Vodafone records Rs109.6 cr profit during FY11

Vodafone Essar, the Indian unit of Vodafone, for the first time has moved from an operating loss to an operating profit during the year ended March 2011. The company posted a 134% jump in the operating profit to Rs109.6 cr for the 12 months ended March 2011 compared with a loss of Rs270.4 cr during the previous year. The operator also recorded an operating free cash flow of Rs3165 cr for March 2011.

Service revenue grew by 16.2% including a 1.7 percentage point benefit from Indus Towers, the Group's network sharing joint venture. Growth was driven by a 39.0% increase in the average mobile customer base and stable usage per customer trends, partially offset by a fall in the effective rate per minute due to an increase in the penetration of lower priced tariffs into the customer base and strong competition in the market.

EBITDA grew by 15.1% driven by the increase in the customer base and economies of scale, which absorbed pricing and cost pressures.

February 2011 also saw the launch of commercial 3G services and subsequent network build. By the end of the year 1.5 million customers had activated their 3G access.