Difficult conditions in Europe continue to impact Vodafone results

12 Nov 2013

UK telecoms giant Vodafone Group has published its financial results for the quarter ended 30 September 2013, with the company reporting a 2.3% year-on-year decline in organic service revenue, as growth in emerging markets was offset by the impact of regulatory changes and the continuing economic slump in Europe.

In the three month period under review Vodafone Group generated revenue of GBP19.061 billion (USD30.495 billion), including GBP17.5 billion in organic service revenues. Vodafone’s Southern Europe division booked a 14.9% decline in service revenues to GBP4.475 billion, driven by cuts to mobile termination rates (MTRs), ‘severe macroeconomic weakness and intense competition.’ Similar conditions in Northern and Central Europe saw service revenues in the region decline by 3.9% on an organic basis to GBP9.47 billion despite the launch of 4G services in the UK and the Netherlands in August. The group attributed a 4.4% decline in service revenue at its domestic unit to an MTR cut introduced in April 2013 and intense price competition. Meanwhile service revenue in Turkey grew by 10.1%, although this was offset by declines elsewhere in the region. More positive results were reported for the group’s Africa, Middle East and Asia Pacific (AMAP) division, which booked 7.0% growth in service revenues on an organic basis, led by expansion of 13.5% in India.

Vodafone Group claimed 411.456 million mobile subscribers as at end-September 2013, compared to 408.577 million three months earlier. Vodacom and Vodafone Egypt were the group’s best performers, registering net additions of 1.482 million and 909,000 respectively, whilst Vodafone’s Italian and Spanish units meanwhile booked net disconnections of 203,000 and 195,000. In the fixed broadband market, the group claimed 6.48 million users, down from 6.526 million in the three months to end June 2013. In contrast to the mobile sector, broadband subscriber growth in Spain and Italy helped offset steep declines in Northern and Central Europe.

United Kingdom, Vodafone Group