Vodafone confident on revenue outlook after tough third quarterThursday 06 February 2014 18.13
Vodafone is confident its revenue would start to improve due to the takeup of faster 4G services and cost cuts, after reporting a sharp fall in quarterly organic service revenue.
Vodafone, which is investing to improve the speed and coverage of its networks after selling its US arm in a $130 billion deal, said organic service revenue was down 4.8% in the three months to December.
It had fallen by 4.9% in the previous quarter.
The group, the world's second largest mobile operator, has reported sharp falls in its key revenue measurement in the last 18 months due to regulatory-imposed price cuts, fierce competition and European consumers reducing the number of calls they make during the downturn.
Today's trading update showed organic service revenue down 9.6% in Europe and up 5.5% in its faster growing emerging market division of Africa, Middle East and Asia Pacific.
"In Europe, conditions are still difficult, and we continue to mitigate these challenges through on-going improvements to our operating model and cost efficiency," chief executive Vittorio Colao said.
"In addition, the shift to 4G is gaining momentum and we have seen improving mobile customer net addition trends. We are therefore optimistic that our revenue performance will begin to improve as regulatory headwinds ease and customer appetite for video and content services increases."
Vodafone described the pressures in Europe, where it competes with the likes of Telefonica, Orange and Deutsche Telekom, as intense.
Organic service revenue in Germany, its biggest market in Europe, was down 7.9%, although increased investment in the quarter did result in improved customer additions, it said.
Britain declined by 5.1% while Italy was down 16.6%.
Vodafone Ireland said it had 2.15 million mobile customers at the end of December 2013 and a total customer base of 2.4 million including broadband users.
It said smart phone usage by customers on its Irish network increased by 6.7% during the final quarter of the year. That means three out of five Vodafone Ireland customers are now using smartphones.
Average revenue per user in Ireland, however, fell by 0.9% on the previous quarter to €28.