Vodafone CEO: India Data Usage 'Not as Healthy' Because of New Competition

By Stu Woo 

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 EUR5 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 [e-mail]

(END) Dow Jones Newswires

November 16, 2016 13:14 ET (18:14 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.