Vodafone Group CEO Nick Read (pictured) slammed the critical status of India’s mobile industry, blaming the performance of its local joint venture and the result of a regulatory decision for continued losses in its fiscal H1 2020.
On an analyst call, Read said the company had no obligation to fund further losses by India joint venture Vodafone Idea, and promised to stop putting group funds into the country, given a regulatory judgement on fees which went against the industry last month.
He described the situation for Vodafone Idea and the industry in the country as “critical”, adding the JV had sought relief from the government, including requesting a waiver on interest and penalties related to the Supreme Court’s decision on adjusted gross revenue fees.
The potentially massive additional costs faced by the unit add to long-running price pressures in India.
Vodafone Group’s €1.9 billion net loss in the six months to end-September compared with a loss of €7.8 billion in fiscal H1 2019, although the latter figure included the cost of stripping Vodafone India out of its results, writing down the value of the unit and a number of other one-off charges. Group revenue was broadly flat at €21.9 billion.
Outside of its liabilities in India, Read said the company had improved the “consistency of our commercial performance” in Europe and through Africa subsidiary Vodacom, which reported yesterday.
The executive added the business was on track to meet its strategies of cutting costs through improved asset utilisation, including by signing network sharing deals, and was in the process of creating a new company to house its towers in Europe.
Following the completion of its acquisition of Liberty Global’s cable assets across five markets in August, Read said Vodafone had made a “fast start” on integrating the units into its core business.
Vodafone expects to have begun rebranding the units within six months. The operator is targeting €563 million worth of annual cost and capex savings by the end of its 2025 financial year (to end-March 2025).