Vodafone Data Usage in India Crimped by Competition, Says CEO
November 16 2016 - 5:40PM
Dow Jones News
BARCELONA—Vodafone Group PLC Chief Executive Vittorio Colao said
Wednesday that customers in India are using the mobile carrier's
data plans less because of a new and well-funded competitor in the
populous country.
The remark came after Vodafone on Tuesday took a €5 billion
($5.36 billion) write-down on its Indian unit, in its half-year
results. Mr. Colao had said the write-down was partly due to an
"extraordinary, unprecedented" promotion from Reliance Jio Infocomm
Ltd., a new cellular operator backed by India's richest man that is
offering free mobile plans for a limited time.
Mr. Colao elaborated on the challenge on Wednesday. "We haven't
seen loss of customers, but we've seen many, many multi-SIM users,"
he said at a Morgan Stanley conference in Barcelona, referring to
people using mobile plans from more than one carrier. Because of
that, Mr. Colao said, usage of Vodafone's data plans was "not as
healthy" as it used to be.
Mr. Colao said it is unclear how the Indian market will shake
out after Reliance Jio's promotion ends, but he said he expected
consolidation among mobile carriers in the country. There are four
major mobile operators in the country and many smaller ones;
Vodafone is the No. 2 carrier.
"My guess is…that marginal players will go, and some of the
bigger ones will probably have to combine," Mr. Colao said.
Mr. Colao also said Vodafone's budding joint venture with cable
and internet provider Liberty Global PLC, to provide a bundle of
services in the Netherlands, was going well so far. He said he
enjoyed working with Liberty Global Chief Executive Mike Fries but
declined to say whether the two planned more partnerships. Analysts
speculate the two telecom giants might consider a merger.
"We see the world the same way," Mr. Colao said. "Is this the
first trial of something bigger? Not necessarily …But of course it
helps to know each other."
Write to Stu Woo at Stu.Woo@wsj.com
(END) Dow Jones Newswires
November 16, 2016 17:25 ET (22:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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