Vodafone Revenues Continue To Slump Despite 370,000 UK 4G Subscribers
Tough conditions in Europe impact Vodafone Q3 revenues, but company is confident in its investments
Vodafone’s reported revenues slid by 3.6 percent to £10.98 billion during the third quarter of 2013, with the British-based mobile operator blaming ongoing challenging conditions in Europe.
Organic service revenue fell by 4.8 percent across the company, with European revenues down by 9.6 percent, but this was offset by strong performance in emerging markets such as India, Turkey and South Africa, where revenues increased by 5.5 percent.
Revenues in Spain and Italy fell by 14.1 percent and 16.6 percent respectively, while they also shrunk by 7.9 percent in Germany.
Vodafone Q3 results
In the UK, service revenue fell by 5.1 percent due to intense competition, especially in the prepaid and enterprise markets, but Vodafone says it has now attracted 370,000 customers to its 4G tariffs since they went live last August.
Vodafone CEO Vittorio Colao admits it has been a challenging quarter in Europe, but remains optimistic that its investments in 4G and fixed line networks will turn things around.
“In Europe, conditions are still difficult, and we continue to mitigate these challenges through on-going improvements to our operating model and cost efficiency,” he says. “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.”
Attractive position
Colao adds that its £19 billion investment programme across all its networks was gaining progress and would offer a stronger network and service differentiation for its customers. He also says the $130 billion sale of its stake in US operator Verizon Wireless should be completed by 21 February.
“After the imminent completion of the Verizon Wireless transaction, we will be very attractively positioned, with a strong balance sheet, improved dividend cover and the financial and strategic flexibility to make further investments in the business or returns to shareholders in the future.”
The sale might also make Vodafone a more attractive target for AT&T, which has strongly been linked with a takeover bid. However any move will not take place for another six months, with the US operator telling the UK takeover panel it had no immediate intentions.
