Vodafone Q2 beats expectations despite ongoing UK issues

UK operator group Vodafone served up solid Q2 2016 numbers that exceeded analyst expectations in spite of ongoing domestic problems caused by its new billing system.

Vodafone chose to describe its Q2 numbers with a somewhat muted ‘continued progress’ label. Service revenues in Europe were flat, but AMAP (Africa, Middle East and APAC) service revenues grew 7.7% to give the whole group 2.2% growth. Analysts were expecting 1.8% growth, according to Bloomberg, and Vodafone shares were up 5% at time of writing.

“We continued to make good progress during the first quarter,” said Vodafone CEO Vittorio Colao. “In Europe, our growth remains stable despite regulatory pressure on roaming revenue, with good performance in Germany, Spain and Italy while we are focussed on improving our performance in the UK.

“Our growth momentum in AMAP remains strong, with excellent performance in South Africa, Turkey and Egypt and ongoing recovery in India. Customers in multiple markets are attracted by our ‘more-for-more’ commercial offerings of larger data bundles and extra services, while we are seeing continued success with our fixed broadband and enterprise strategies.’’

In the subsequent presentation there was a lot of emphasis on customer experience initiatives, perhaps with the UK debacle in mind. There was talk of good Net Promoter Scores, wholesome KPIs and a somewhat forced acronym: CXX, which stands for Customer eXperience eXcellence. CEM is obviously one of the main areas operators look to for differentiation and it’s good that Vodafone has formalised this process, but no amount of slick PowerPoint slides can compensate for getting the basics right, as Vodafone UK will be painfully aware.