Vodafone has reported its third quarter results with less decline than expected, with growth in the UK and steady recovery in its European operations. Across the entire group, the telco added 5.5 million net mobile customers in the three months ended in December.

Auri Aittokallio

February 6, 2015

2 Min Read
Vodafone slows sales decline, UK in growth in Q3

Vodafone has reported its third quarter results with less decline than expected, with growth in the UK and steady recovery in its European operations. Across the entire group, the telco added 5.5 million net mobile customers in the three months ended in December.

The operator’s Q3 group organic revenue totalled £10.9 billion, declining -0.4% compared to the same time last year but faring better than the analysts’ prediction of around -0.7%. After several years of declines, the telco returned to growth in the UK with an increase of 0.9% year-on-year. European operations showed slowing year-on-year decline, with Germany decreasing by -1%, Italy -7.4% and Spain -8.9%.

In the entire European market, organic service revenues declined -2.7% compared to the same period last year, but still slowing decline quarter-to-quarter (-1.5% in Q2). The firm said it started to see the early benefits of 4G migration and increased data usage to ARPU, reporting it now has 10.1 million 4G subscribers in Europe.

In the UK, the operator added 76,000 mobile net customers during the 3rd quarter, and had 2.2 million 4G users. In Germany the operator gained 235,000 mobile net customers within Q3 (12,000 in Q2), and said it has 3.4 million 4G subscribers in the country. Within the Spanish market, revenues declined -8.9% year-on-year and there are 2.2 million 4G customers. Mobile net additions came to 28,000 but these include both consumer and enterprise.

“We have achieved another quarter of improving revenue trends in most of our major markets,” Vittorio Colao, Vodafone Group CEO said. “Growth in India has accelerated again, driven by data. In Europe, improved commercial execution in both mobile and fixed over the last few quarters, combined with strong data demand and a more stable pricing environment, is supporting the steady recovery in the top line. Our recent cable acquisitions continue to perform well, with good progress made on integration.

Vodafone attributed the improved quarterly performance on its Project Spring, its network investment programme in Europe. “Our Project Spring investment programme is well advanced, with 4G coverage in Europe now 65%, dropped call rates down to 0.64%, and 26 million homes now passed by our own next generation networks: our customers are really beginning to notice the difference in experience that this investment delivers. We are confident that, over time, this will translate into further improvements in customer perception, ARPU and churn.”

Bengt Nordström, CEO of consultancy firm Northstream agreed Project Spring is starting to work. “It’s also becoming increasingly obvious that Vodafone has historically underinvested in its networks in Germany, Spain, Italy and the UK,” he said. “The signs are that its Project Spring network upgrade is beginning to pay off, especially in Germany and the UK, but there is still some way to go.”

About the Author(s)

Auri Aittokallio

As senior writer for Telecoms.com, Auri’s primary focus is on operators but she also writes across the board the telecoms industry, including technologies and the vendors that produce them. She also writes for Mobile Communications International magazine, which is published every quarter.

Auri has a background as an ICT researcher and business-to-business journalist, previously focusing on the European ICT channels-to-market for seven years.

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