Despite reporting increase in profit, British Telecom giant, Vodafone, is suffering in
On May 18, 2010, the company published its report for FY 2009-2010 ending on March 31, 2010. The company observed about three-times growth in net profit at ₤8.61 billion against ₤3.08 billion in FY 2008-2009.
Overall revenue increased by 8.4% to ₤44.5 billion. Vodafone credited this high profit to its growth in mobile data and fixed coupled with cost cutting measures.
EBITDA rose by 12.5% to ₤ 807 million and revenue grew by 16% to ₤3.11 billion.
Vodafone Group PLC, which is the second-largest mobile operator in the world in terms of revenue, entered the Indian market in 2007 and since then observed consistent growth.
However, incurring a high impairment charge of ₤2.3 billion coupled with intense price competition from other operators in the market and increasing cost of mobile spectrum is affecting the company’s profit margin.
Over the year, Indian government allowed many operators in the market and there is no opportunity for consolidation. Moreover, the bid for 3G spectrum went beyond analysts’ expectation and still going strong.
Chief Executive, Vittorio Colao said, "We have seen very strong price declines," Colao told reporters. "I don't think these rules (on consolidation and spectrum) make sense.
The impairment charge and