Vodafone (LON:VOD) have reported a slowdown in their Indian business, as the technological giant reported a loss to shareholders following a disastrous trading period.
Earlier this week, Vodafone reported a half year loss which causes their shares to sink and the news from overseas operations in India will only add salt to the wound.
Shares in Vodafone sunk 1.92% after the poor trading update to 156p. 15/11/19 11:29BST.
India has been one of Vodafone’s booming markets in recent times, with more than a billion mobile subscribers but across financial 2019 business has slumped.
It was reported that the prices of telephone calls fell in India, but the data prices continued to remain high which would have added to Vodafone’s losses.
The stiff competition of firms such as Reliance Jio (NSE: RCOM) and Tata Communications (NSE: TATACOMM) have slashed data costs leading to India boasting the cheapest mobile data in the world.
Overseas competitors such as Deutsche Telekom (ETR: DTE) have experienced a crisis as well as they slashed their dividend, whilst BT (LON: BT.A) hit UK headlines after Labour pledged to nationalize the firm on Friday morning.
Earlier this week, Vodafone’s CEO Nick Read warned that the company’s India operation could be in doubt unless the government stopped hitting operators with higher taxes and charges.
“Financially there’s been a heavy burden through unsupportive regulation, excessive taxes and, on top of that, we got the negative Supreme Court decision,” he was reported as saying on Tuesday.
There have been reports that the substantial loss could result in the exiting of Vodafone from the Indian market, which could cost India more than Vodafone.
Amidst the crisis, Vodafone have also threatened to quit operations and business in India after reports that they were unwilling to pay the heavy tax demands.
The results come at a tough period of trading for Vodafone, however it seems that there is a reluctance for the telecom giant to exit the Indian market.
However, if tax disputes and revenues are not stimulated then shareholders may be concerned about future updates and share prices.