Vodafone & Airtel P & L Analysis

Analysis of Annual Reports of Vodafone & Airtel for the year 2010-11. It contains there comparison of different aspects of the income statement, balance sheet and cash flow. For example, bad debts, R&D investments, EBITDA. You will also notice different in segmentation approach for profit centers. Vodafone has a more region based segmentation while Airtel has it two tier- regional and nature of service based division. For both of them India is the most important market giving highest subscriber base and potential for future growth as the third largest telecom market of the world. India accounted for 8.33% (=3,855/46,243*100) of Vodafone's total revenues of 31 March 2011. Although revenues in European countries are higher, the market there is showing declining growth. And of the most growing segment of Vodafone in terms of revenue i.e Africa, Middle East and Asia, India alone accounts for 28.97% of revenues. Hence, it is a very significant market for Vodafone in terms of revenue as well as potential for growth. Given that, Bharti Airtel is the largest wireless operator in India with a revenue market share of 30% and the revenues from Mobile services in India & South Asia (excluding intersegment revenues) accounted for ~ 57.98% of Bharati's total revenues, we can say that it is the most important segment for the company. In the Indian GAAP, goodwill on acquisition is measured as the excess of purchase consideration over the company's interest in the net identifiable assets of the acquired entity. Subsequently it is amortized on a straight line basis over the remaining period of service license of the acquired company or over 10 years, whichever is less. In IFRS, goodwill represents the excess of the cost of acquisition together with the previously held interest in respect of acquired entity over the company's interest in the net fair value of the identifiable assets and liabilities of the entity. In the IFRS, goodwill is NOT subject