India’s second largest operator Vodafone reported strong growth in data revenue and data customers for the first half of its FY2016 as smartphone penetration continued to climb.

A 56 per cent jump in data revenue to INR39.79 billion ($599 million) helped boost service revenue 6.2 per cent to INR218.8 billion for the six-month period ending 30 September. Without regulatory impacts (such as roaming caps and service tax), it said service revenue would have grown 11.2 per cent to INR229 billion.

Overall revenue was up 6.1 per cent to INR219.6 billion, while EBITDA increased 6.7 per cent during the period to INR65.34 billion.

The operator, with a 19 per cent market share, grew its mobile user base 8.2 per cent to 188.2 million from a year ago, with 3G connections growing 75.4 per cent to 23.8 million. 3G revenue increased 102 per cent.

While overall ARPU was stable year-on-year at INR102 ($1.54), data ARPU rose 9.5 per cent to INR161. Smartphone users expanded 57 per cent during the period, with smartphone penetration increasing to 28.3 per cent from under 20 per cent a year ago.

Its M-Pesa money transfer and microfinancing service has more than 3.9 million registered accounts/customers, with over 160,000 transactions a day. The company said money transfers represent 65 per cent of all transactions.

H1 capex rose 3.4 per cent to INR36.27 billion from a year ago. 3G base stations now account for 30 per cent of its total 135,000 sites.

The company will launch 4G services beginning in December in five service areas that are key to its data revenues and will continue to expand its 3G coverage to 16 regions, said Vodafone India MD and CEO Sunil Sood.

“A robust and resilient network architecture with strong backhaul is being built to support the increasing volumes and need for speed from both retail and enterprise customers,” he added.

Its parent company said yesterday that it had started preparations for an initial public offering of Vodafone India, “subject to market conditions”.