India helps Vodafone reap huge profits

LONDON: In its interim management statement for the first quarter, Vodafone announced today that the Group's new business in India has registered 3.0 million customer net additions from completion of the acquisition until the end of the quarter, bringing the closing customer base to 30.8 million, up 75% on June last year. Year on year total revenue growth for the quarter was 50% in local currency, assuming the Group owned the business for the whole of both quarters.

Group revenue increased by 7.5% to £8.3 billion. The net impact of acquisitions and disposals, principally due to Turkey and India, contributed 5.3 percentage points to revenue growth offset by 1.8 percentage points from adverse movements in exchange rates.

India and Turkey business helped offset tough German and Italian markets, to give Vodafone a revenue topping most expectations. Vodafone, the world's second-largest mobile phone company by customers behind China Mobile, added 9.1 million subscribers in the three months to the end of June, taking its customer base to around 232 million.Group revenues climbed 7.5 percent to 8.3 billion pounds ($17.0 billion). Excluding acquisitions, organic revenue grew 4 percent as weakness in markets such as Germany and Italy cast a pall over a stronger performance in Spain and Britain.

Vodafone shares climbed over 2 percent in early trade and at 0750 GMT stood 1.32 percent higher at 161.3 pence, valuing the business at about 87 billion pounds.

The first quarter boosted by Hutchison Essar, India's third-ranked mobile group in which Vodafone secured a controlling stake for $11 billion in May. Vodafone said assets in India and Turkey had seen year-on-year revenue growth of 50 percent and 32 percent respectively, in local currencies.

Analysts said vodafone's promotional activities seem to be bearing fruit, though its European operations continued to face pressure.Compounded by Vodafone's move to slash once-lucrative prices for using mobile phones abroad, fiercely-competitive Germany posted a 6.3 percent drop in revenues. In Italy, where the so-called Bersani decree prohibits operators from charging top-up fees on pre-paid phone deals, revenues fell 3.1 percent.

The overall performance for the quarter is consistent with expectations and the Group is therefore reiterating its

outlook statement for the year ending 31 March 2008. The Group's expectations for average foreign exchange rates

for the 2008 financial year are unchanged from those announced on 29 May 2007.

Group revenue is expected to be in the range of £33.3 billion to £34.1 billion. Adjusted operating profit is expected to

be in the range of £9.3 billion to £9.8 billion, with the Group EBITDA margin lower year on year. Total depreciation and amortisation charges are anticipated to be around £5.8 billion to £5.9 billion, higher than the 2007 financial year, primarily as a result of the Vodafone Essar acquisition.