Vodafone Targets European 4G And Fixed Growth As Revenues Fall Again

Vodafone says strong demand for 4G and its ongoing investments in fixed line communications will help it turn the corner after continued poor performance in Europe contributed to a 4.2 percent in service revenue to £9.4 billion during the first quarter of 2014.

Overall, revenue fell by 7.9 percent in Europe to £6.5 billion but it increased by 4.7 percent in Asia, the Middle East, Africa and the Pacific to £2.9 billion.

The British-based operator blamed continuing competition and regulation issues for creating a “challenging” environment in Europe, but said strong progress in its £19 billion ‘Project Spring’ investment programme is cause for optimism.

Vodafone 4G growth

“This year has started in line with expectations,” says Vodafone CEO Vittorio Colao. “Through our commercial actions and investments, our performance is beginning to stabilise quarter-on-quarter in several of our European markets, with customer appetite for 4G services clearly growing.”

Its 4G networks now cover 52 percent of the population of its European territories, up from 46 percent during the previous quarter thanks to the installation of 4,700 new masts across the continent. In total it has 6.7 million 4G customers in all countries.

In the UK, service revenue fell by 3.2 percent as falling enterprise, fixed and prepaid revenues offset growth in postpaid mobile revenue which increased thanks to 4G. Vodafone 4G now has 900,000 customers in the UK and 40 percent coverage.

Fixed and M2M hopes

The Newbury-based firm is confident that growing demand for mobile data services and fixed line communications provide a solid base for the future. Acquisitions of Kabel Deutschland in Germany and Ono in Spain have complemented fibre rollouts in Italy, Spain and Ireland, while a fibre sharing agreement with Portugal Telecom was announced earlier this week.

Around 190,000 new residential broadband customers were added during the period as Vodafone seeks to offer quad-play packages of mobile, landline, television and broadband services to consumers and unified communications to businesses.

Fixed line now represents 34 percent of Vodafone’s total revenue and M2M services are becoming increasingly important. M2M revenue is up 30.7 percent and the company recently announced plans to acquire Cobra, which provides M2M services to the automotive and insurance industries.

“In unified communications, we have made further good progress on our strategy, continuing to implement our plans in several markets, and our customer growth trends demonstrate the strength of our commercial execution,” adds Colao.

What do you know about Vodafone? Take our quiz!