Vodafone’s UK Misery Continues But Investments & Fixed Growth Suggest Revival Is Near

Vodafone’s UK business continues to struggle amid intense competition in the enterprise market, but the company did manage to add 31,000 broadband customers during the most recent quarter.

The Newbury-based operator reported growth in other parts of Europe and in emerging markets (except for India), but UK revenues slumped by 4.5 percent to €1.8 billion.

However it is confident that investments will reverse this trend, pointing out the improved reliability of its service and the 97 percent population coverage of its 4G network.

Vodafone 4G

In recent months, Vodafone has outlined plans to boost the speed and capacity of its LTE infrastructure ahead of the rollout of 4.5G and 5G, and promised to improve customer service levels with AI technology and more staff.

And the performance of its home broadband service, alongside its IoT network, will give the company cause for optimism. Indeed, it already has more than 50 million connections worldwide

Across all markets, Vodafone has 83.5 million 4G subscribers, of which 8.8 million were added during the quarter, and 15 million broadband customers –of which 8.3 million are superfast and 4.4 million are ‘converged’.

“We have made a good start to the year in Europe, where our commercial momentum remains robust, and growth accelerated across AMAP,” said Vodafone Group CEO Vittorio Colao. “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.”

Analysts agree that the UK market is set to be more favourable for Vodafone in the near future.

“Vodafone’s results revealed few surprises. Tentative recovery in Europe continued, led by Spain and Italy which more than offset another mixed bag for the UK,” commented Kester Mann, analyst at CCS Insight.

“The UK business remains in the doldrums, but some encouraging signs are emerging of a long-awaited turnaround. Notably, contract churn fell for a second consecutive quarter, while Net Promotor Score (NPS) continues to rebound. The operator will point to strong recent investment in network and customer service as drivers of recovery, but it still has plenty to do to regain standing in one of Europe’s most competitive markets.”

Others suggest Vodafone must pay more attention to its home market as Brexit’s impact starts to be felt.

“While these latest results show that Vodafone is operating a relatively stable business in many foreign markets, the impact of Brexit on its UK operations is already being felt,” claimed Matthew Kendall, telecoms analyst at the Economist Intelligence Unit (EIU).

“Although the rate of UK revenue decline slowed in this quarter, the falling value of the pound and the adverse impact of the abolition of EU roaming charges are areas of concern for its domestic business going forward.”

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