Vodafone's reported revenues drop 3.9% in fiscal third quarter

2 Feb 2017

British telecoms giant Vodafone Group has published its trading update for its fiscal third quarter ended 31 December 2016, showing a 3.9% year-on-year drop in reported revenues. In the period under review Vodafone generated a total turnover of EUR13.687 billion (USD14.8 billion), down from a restated figure of EUR14.247 billion in the last three months of 2015. Meanwhile, group service revenue in the most recent fiscal quarter totalled EUR12.300 billion, compared to EUR12.705 billion a year earlier. While this also represented a y-o-y decline – of 3.2% – Vodafone said it had recorded organic service revenue growth of 1.7%, with its Africa, Middle East and Asia Pacific (AMAP) division specifically registering organic service revenue growth of 3.9%.

With Vodafone saying that trading in the quarter was within its management’s expectations underlying the outlook statement for its 2017 fiscal year, it confirmed it expects to meet the lower end of its EBITDA guidance range and achieve its free cash flow target. Any continued uncertainty in India was, it said, mitigated by the group’s ‘sustained performance’ in Europe and Africa.

In operational terms, Vodafone was keen to highlight the continued strong uptake of its LTE-based services, revealing that as at 31 December 2016 it had a total of 64.6 million 4G subscribers across the 22 countries where it offered such services, having added 7.6 million net new customers in the quarter. This increased 4G adoption is one factor which the company said had helped to drive higher usage, with average usage per smartphone user in Europe up by 51% y-o-y to 1.5GB per month. Vodafone’s total mobile subscriber base rose to 469,568 million at the end of 2016, meanwhile, up from 460.991 million a year earlier, with fixed broadband accesses increasing to 14.322 million, compared to 12.957 million at end-2015.

Commenting on the group’s quarterly performance, Vodafone Group CEO Vittorio Colao, said: ‘Our overall performance in Europe and Africa remained strong during the third quarter, reflecting good execution. In Europe, service revenue growth continued, led by Italy, Germany and Spain. Mobile contract ARPU continued to stabilise, reflecting the successful adoption of our ‘more-for-more’ propositions, while we remain Europe’s fastest growing broadband company, illustrating our effective convergence strategy.’

United Kingdom, Vodafone Group