Indian auction rings up £1.9bn bill for Vodafone

Vodafone has shelled out £1.9 billion in the Indian government’s latest auction of its airwaves as the mobile phone giant seeks to ramp up its voice and data services across the country.

The group has bought extra slices of the 3G and 4G spectrum in areas such as Delhi, Mumbai and Kolkata. About £540 million is payable in the current financial year, with the rest due in instalments starting in 2017.

Analysts at Espirito Santo said: “The final prices paid are close to double the pre-auction estimates of about £1bn and highlight that operators were starved for spectrum in this market and feel they can recover these costs by driving high growth in 4G data services.”

Vodafone, which expects to complete the $130bn (£77.8bn) sale of its stake in US joint venture Verizon Wireless on Friday, has more than 160 million customers in India, where revenues soared by 13.2 per cent to £937m in the three months to the end of December. That compares with a 5.1 per cent decline in UK, where the firm has more than 19 million customers, as it suffered “intense price competition”.

Overall revenues fell 4.3 per cent to just below £11bn in the third quarter, but chief executive Vittorio Colao said he was confident that sales will start to improve as more customers take up superfast 4G services.

Data usage is growing strongly among Indian consumers, and Vodafone said the number of mobile internet users jumped 38 per cent to 45.7 million in its most recent quarter.

The Indian government recently gave the green light for the Berkshire-based group to take full control of its Indian subsidiary in a $1.6bn deal. Foreign companies were previously blocked from owning more than 74 per cent of local telecoms firms, but this restriction was lifted last year.