For the first time Vodafone posted a profit of euro 15 million (Rs 109.5 crore) from India operations for the financial year ended March Last year recovering from a loss of euro 37 million (Rs 270 crore).

Service revenues from India grew 16.2 per cent, with a 1.7 per cent contribution from its tower joint venture, Indus Towers. “Our performance in India has been driven by increasing voice penetration and a more stable pricing environment,” said Vittorio Colao, chief executive officer of Vodafone Plc.

The company attributes this growth to a 39 per cent increase in average mobile customer base and the related economies of scale. Stable usage trends by customers also contributed. This, however, is partially offset by a fall in the effective rate per minute due to an increase in the extent of lower rates and strong competition in the market..

The free operational cash flow, too, went up to euro 433 million (Rs 3,161 crore) as compared to euro 7 million (Rs 51 crore) loss a year ago. The Ebitda (earning before interest, taxes, depreciation and amortisation) for the year grew 22 per cent.

India's second largest telecom company today said around 1.5 million customers had activated 3G services by the end of March. It launched these services in February. For the quarter, the company's data revenues grew 63.6 per cent, while total revenues went up 17.2 per cent.

The British major owns 67 per cent stake in the Indian joint venture, Vodafone Essar, and has agreed to pay $5 billion (Rs 22,300 crore) to acquire the rest of the stake. The deal will be closed by the end of the year.

The company, entangled in a legal battle with the Indian tax authorities over the 2007 deal with Hutchison, is making sure no such trouble arises on its deal with Essar. They sought confirmation from the Authority for Advanced Rulings (AAR) in India on whether withholding tax is due for the deal, and a ruling is expected by the end of the month.

“The group does not believe that there is any legal requirement to withhold tax in respect of these transactions but if, contrary to expectations, the AAR directs tax to be withheld, this amount is anticipated to be approximately an additional $1 billion,” the company said.