Data demand lifts Vodafone but sales slide
TOUGH trading in Spain and Italy dragged Vodafone’s third quarter group revenues down 2.3 per cent to £11.6bn, causing the mobile phone operator to fall short of forecasts.
Spanish revenues fell 8.8 per cent – albeit an improvement on last quarter’s drop of 9.3 per cent – to £1.1bn, while Vodafone fared worse in Italy, dropping 4.9 per cent compared to a three per cent decline in the previous quarter.
However, the network confirmed it would stick to its full-year guidance.
Service revenues in the UK grew one per cent in the period to £1.27bn, thanks to strong demand for mobile data services where revenues jumped 13 per cent. European data revenue was up 22 per cent, boosting mobile internet revenues 55 per cent.
Vodafone added 174,000 new contract customers in the quarter, and said 39 per cent of its UK customers are now on smartphone compared to a European smartphone penetration of 24 per cent.
Vodafone chief executive Vittorio Colao told reporters: “This is the highest level in Europe, which sets Great Britain as a leader in the smartphone market despite displaying slightly lower consumer confidence.”
Overall UK customer numbers dropped 1,000 to 19.3m due to pre-pay mobile termination rates.
Vodafone’s results were buoyed by a strong growth in India and Turkey, where service revenues were up 20 per cent and 24 per cent respectively.
India, which generated £1bn in the quarter and saw data revenues jump 46 per cent, ended the quarter with 31m data users following the launch of 3G services this time last year.
Last week Vodafone announced the sale of Essar’s share of its Indian operations to Piramal Healthcare for £385m, taking the division a step closer to a possible public offering.
However, Colao told reporters that the stages still to be taken will ensure the IPO does not come before 2013.
Free cash flow was up 35 per cent to £1.47bn at the end of the quarter.
Shares rose one per cent to 174.5p.