Vodafone “holding the fort”

Vodafone, the world’s largest operator by revenues, held the fort during the quarter ended June 30, reporting revenues of £10.7bn, up 9.3 per cent year on year.

But the global market is still tough, with organic service revenue down 2.1 per cent year on year, although data revenues helped rescue the firm’s revenues by climbing 19.4 per cent year on year on an organic basis to £888 million.

European and African service revenues were down but increased in the Asia Pacific and Middle East regions, with Michael Kovacocy, European telecoms analyst and sector strategist at Daiwa Securities, highlighting deterioration in Germany, Vodafone’s key European market, as a distinct negative.

“What we consider to be a very good management team is doing as best it can in what is an increasingly difficult situation,” the analyst said.

There was little visibility into earnings and margins, with the company stating “the Group’s EBITDA margin decline during the quarter was consistent with management’s guidance for the current financial year”.

The carrier’s proportionate mobile customer base topped 315.3 million at the end of June, following 8 million net additions during the quarter.

In November 2008 the company announced a cost cutting programme which targeted a £1bn reduction in operating costs by the end of 2011. Savings of more than 65 per cent of this target are expected to be generated by the end of the current financial year, Vodafone said.


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