Vodafone revenues dip as India stabilises

 
Emma Haslett
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Not quite racing ahead: Vodafone said losses in India were stabilising (Source: Getty)

Things were looking more encouraging for Vodafone in its first quarter, as losses from its Indian operation "stabilised".

The figures

Group revenue dipped 3.3 per cent to €11.5bn (£10.3bn), with revenues in Europe falling 4.8 per cent to €8.3bn, while revenues in Africa, the Middle East and Asia Pacific rose 1.2 per cent to €2.9bn.

However, service revenues, its preferred measure, rose 2.2 per cent to €10.3bn.

In the UK, service revenue fell 2.7 per cent, slower than the 4.8 per cent decline in the fourth quarter, while mobile service revenue fell 2.3 per cent, down from a 3.9 per cent fall.

In its troubled Indian operation, organic service revenue fell 13.9 per cent to €1.39bn, which it put down to price competition.

However, it said it was gaining momentum in the broadband market, with 300,000 net new broadband customers taking its total to 15m, and 98m potential households across Europe.

Why it's interesting

Like other telecoms providers, Vodafone has been hit by added competition and tough new rules in the market: last year it posted a €6.1bn annual loss thanks to a writedown on its Indian operations, where heavy competition drove it to pursue a $23bn merger with local rival Idea Cellular in March this year.

The company has slowly been consolidating its operations: in May it announced plans for a €506m tie-up of its Maltese arm with local cable, broadband and TV provider Melita, in which it will have a 49 per cent stake.

Currency fluctuations haven't helped: today it said 1.7 percentage points of the 4.8 per cent revenue decline were thanks to foreign exchange movements.

But today's figures were firmly in line with expectations, and Vittorio Colao, its chief executive, took that as encouraging.

What Vodafone said

"We have made a good start to the year in Europe, where our commercial momentum remains robust, and growth accelerated across [Africa, the Middle East and Asia Pacific]," he said.

Colao added:

Although competition in India remains intense, service revenues stabilised compared with the prior quarter. Our substantial investments in network leadership, an excellent customer experience and even greater 'more-for-more' propositions for customers are enabling us to monetise strong demand for mobile data.

We are gaining profitable market share in broadband, and a growing proportion of our customers now take our fully converged offers. Our world-leading Internet of Things platform contributed to another quarter of solid growth in Enterprise. In addition, we are executing our 'Fit for Growth' cost efficiency programme in line with our plans. Overall, this performance gives us confidence in reiterating our outlook for the year.

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