The reason for Vodafone’s decision to enter into merger talks in India were laid bare as the UK-based operator unveiled its latest financials.

Revenues at its Indian opco declined 1.9 percent year-on-year – rising to -5.5 percent when forex movements are included – to €1.45 billion in the three months to December.

Vodafone said that despite adding four million customers in the period, competition had “heightened”.

For example, new entrant Jio’s move to offer free data services meant Vodafone’s data browsing revenue growth slowed from 16 percent in the three months to September to 0.6 percent in the last quarter.

The company said earlier this week it was having discussions with the Aditya Birla Group about a possible merger in India.

Talks are ongoing.

The performance of other markets in the region, notably Turkey, Egypt and Ghana, pushed like-for-like service revenues at Vodafone’s Africa, the Middle East and Asia Pacific business unit up 3.9 percent to €4.5 billion.

Group revenues fell 3.9 percent to €13.7 billion, largely due to negative forex movements, but like-for-like services revenues grew 1.7 percent.

Alongside challenges in India, Vodafone has problems in its home market.

The UK had a terrible quarter as reported revenues fell 19 percent on the back of the weak pound, while enterprise and MVNO customer losses pushed like-for-like service revenues down 3.2 percent.

Group CEO Vittorio Colao said that the long-awaited launch of TV services remained on hold as it looked to build up its base of broadband customers.

It added 32,000 retail broadband customers in the period to reach 129,000 in total.

Despite the fall in the UK, like-for-like service revenues in Europe registered a 0.7 percent increase.

Italy was the standout performer, as the company added one million 4G customers in the quarter to hit 8.3 million in total and services revenues from fixed-line services jumped 12 percent.

However, Colao said the impending launch from France’s Iliad would “clearly” present a challenge going forward.

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