Vodafone India reported service revenue increased 2.3 per cent to £3.1 billion in its fiscal Q3, with growth slowing due to competitive pressure bringing down both voice and data prices and data customer growth.

The operator said that excluding the impact of regulatory changes, including cuts in termination rates, roaming price caps and an increase in service tax, service revenue grew by 7.6 per cent during the October-December period. The revenue growth was down from a 5.6 per cent increase in Q2.

While total voice traffic continued to grow, it was more than offset by a decline in voice revenue per minute, which fell 9.8 per cent year-on-year as a result of ongoing price competition.

Data growth remained strong, with usage increasing 64 per cent as its 3G user base expanded to 25.9 million. But the rate of revenue growth slowed in the quarter as price competition intensified, leading to a 16 per cent year-on-year decline in data prices. Increasing bundle adoption also led to a reduction in data revenue growth.

Its total customer base increased by 5.4 million, or almost 3 per cent, to 193.6 million during the quarter.

To address the dropped call problem, the operator added 7,600 3G sites in the quarter. It said it remains on track for 95 per cent 3G coverage in targeted urban areas by March.

Vodafone launched 4G services in Karnataka and Kerala and plans to expand 4G coverage to three additional regions soon.

Its M-Pesa service continued to expand, with 962,000 active customers and 102,000 agents.