Vodafone reports organic revenue growth for final quarter of 2015

4 Feb 2016

UK telecoms giant Vodafone Group has published its financial results for the three months ended 31 December 2015, recording a 2.6% year-on-year organic growth in group revenue as it saw improving trends in Europe.

For the quarter under review Vodafone Group generated revenues of GBP10.283 billion (USD15.6 billion), down 5.5% in reported terms, including negative impacts of 0.2% and 7.9% from mergers and acquisitions (M&A) and foreign exchange rate movements, respectively. Group service revenue totalled GBP9.169 billion, representing an increase of 1.4% against the corresponding period a year earlier, although the company highlighted the fact that excluding the impact of mobile termination rate (MTR) cuts, group service revenue was up 2.1% y-o-y.

In Europe, total revenue was down by 6.0%, including a 0.1% favourable impact from M&A and a 6.7% adverse impact from foreign exchange movements. Service revenue also dropped – by 7.1% in reported terms but by only 0.6% in organic terms, compared to a 1.0% drop in the previous quarter supported ‘by a continued improvement in our commercial performance and a more stable pricing environment in many markets’. Excluding the impact of MTR cuts, service revenue declined by 0.3% y-o-y. By comparison, total revenue attributed to the group’s Africa, the Middle East and Asia-Pacific (AMAP) division fell 3.5%, including a 10.9 percentage point adverse impact from foreign exchange movements. Service revenue in AMAP was also down in reported terms – falling by 3.6% to GBP2.926 billion – but again was up organically by 6.5%, with the main drivers said to have been customer growth and a ‘strong demand’ for mobile voice and data services.

In operational terms, Vodafone Group’s total mobile subscriber base stood at 460.991 million at the end of December 2015, of which 34.8 million had signed up to a 4G service across the 20 markets where the technology has been deployed. Having added some 4.7 million 4G accesses in the quarter, the company also noted that in Europe 23% of its customer base now takes an LTE-based tariff. Further, 4G now accounts for 45% of all data traffic on the group’s European network. Away from mobile, the group said it was continuing to make ‘good progress towards becoming a full service integrated operator’ in its main markets, with 69 million premises now able to sign up for a Vodafone-branded fixed broadband service, of which 29 million are on-net. As at end-December 2015 Vodafone Group had a total of 12.543 million fixed broadband customers, with 414,000 connecting in the final three months of 2015.

Finally, with regards to the group’s Project Spring investment programme, Vodafone Group has completed 92% of the mobile build. Since the project began it has added 165,000 mobile sites, modernised 102,000 sites, and upgraded 91,000 sites to high capacity backhaul. As a result, in Europe its outdoor 4G population was 84% at the end of last year, up from 65% a year ago, while targets for both data sessions above 3Mbps and dropped call rates have already been achieved at 90% and 0.5% respectively. Meanwhile, 4G carrier aggregation is said to have been deployed across 7,300 sites in Europe to enhance customers’ data experience, with voice-over-LTE (VoLTE) now live in four markets.

United Kingdom, Vodafone Group