Vodafone Group reports 0.4% organic decline in service revenues in last quarter of 2014

5 Feb 2015

British telecoms giant Vodafone Group has published its financial results for the quarter ended 31 December 2014, with improved service revenue in the Africa, Middle East and Asia Pacific (AMAP) region again failing to offset declines in Europe.

For the period under review Vodafone Group reported a total turnover of GBP10.881 billion (USD17.2 billion), up 13.5% year-on-year on a reported basis, though only representing growth of 0.7% in organic terms. Group service revenue, meanwhile, totalled GBP9.789 billion, down 0.4% against the same quarter of 2013 in organic terms, while service revenues attributed to its European unit fell by 2.7% to GBP6.626 billion; notable declines were registered in Spain – GBP788 million in 4Q14, compared to GBP924 million a year earlier – and Italy – where service revenues declined by 7.4% to GBP1.037 billion. By comparison, service revenues in the AMAP region stood at GBP3.062 billion, representing 5.9% year-on-year organic growth, with a 15% y-o-y increase in organic terms in India to GBP1.103 billion more than offsetting a 3.9% decline in service revenues attributed to South Africa-based Vodacom.

Capital expenditures in the last three months of 2014 was GBP2.1 billion, an increase of 39.2% year-on-year, with this said to reflect the ‘significant investment’ it is making as part of ‘Project Spring’, its organic investment programme designed to ‘accelerate and extend [the group’s] strategic priorities through investment in mobile and fixed networks, products and services, and [its] retail platform’. With regards to that project, Vodafone Group noted, with it now at the half-way mark, it has modernised 61,000 mobile sites, added a further 86,000 2G, 3G and 4G sites, and upgraded some 50,000 sites, while in terms of fixed line infrastructure it said it now has deployed its own high speed next generation network technology to a further 700,000 households in the quarter, bringing the total number of households passed in Europe to 26 million, or 48 million including wholesale agreements. On the back of its investment, it now claims that its 4G outdoor population coverage in Europe is 65%, up from 38% a year ago, equivalent to covering 222 million people.

In terms of subscribers, meanwhile, Vodafone Group said that, with 4G now available in 18 of its markets, the number of customers that had signed up for such a service had risen to 13.7 million across the group, with 4G now accounting for 26% of data traffic in its European markets, compared to 17% a year ago. Vodafone Group’s total mobile subscriber base stood at 443.552 million, up from 438.469 million three months earlier, with the largest gains seen in India, which added 4.829 million customers in the quarter to reach 178.676 million. Italy, by comparison, saw the largest decline, shedding more than half a million customers to bring its total down to 25.507 million.

Commenting on the results, Vittorio Colao, Vodafone Group’s chief executive, commented: ‘We have achieved another quarter of improving revenue trends in most of our major markets. 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.’

United Kingdom, Vodafone Group