Vodafone Group revenue dragged down by European operations

21 Jul 2017

British telecoms giant Vodafone Group has published a trading update for the fiscal first quarter ended 31 June 2017, reporting group turnover of EUR11.47 billion (USD13.3 billion), down from EUR11.87 billion in the corresponding period a year earlier. While the company noted that it had seen ‘good momentum in Europe’, with what it termed ‘robust growth’ in Italy and Spain, total revenues from its European division was down 4.8% year-on-year in the first quarter of its current fiscal year at EUR8.29 billion. By comparison, turnover from Vodafone’s Africa, Middle East and Asia Pacific (AMAP) division was up 1.2% in reported terms, at EUR2.88 billion. On an organic basis, meanwhile, the company claimed y-o-y growth, with total group revenues up by 2.2% on an annualised basis. Service revenues totalled EUR10.28 billion in the group’s first trimester (1Q18), representing a 4.6% annual decline in reported terms, with a 1.3% y-o-y increase reported for the AMAP unit (to EUR2.43 billion) failing to fully offset a 6.2% in Europe (EUR7.62 billion).

Vodafone also said it had continued to make good progress during the quarter in terms of the strategic growth areas. To that end, it revealed that data traffic had continued to grow rapidly in the quarter (up 63% y-o-y), while it noted that, in absolute terms, the growth in traffic during the quarter was equivalent to its total quarterly data traffic just two years ago. 4G services continue to attract subscribers, meanwhile, with the company reporting a total of 83.5 million customers across the 22 countries where it now offers LTE-based services, up 8.8 million quarter-on-quarter. In the fixed line arena, Vodafone noted that it is now able to market high speed broadband services to 98 million households across Europe, an increase of 24 million from mid-2016, of which 36 million are on-net. Customer numbers also continue to rise, with the British company reporting 15 million broadband accesses at end-June 2017 (18.5 million when including VodafoneZiggo and India), having added 1.5 million in the year to that date. Of the latest total, 8.3 million broadband subscribers were said to be connected via fibre or cable, with 6.5 million of those customers being on-net.

Vittorio Colao, Vodafone Group CEO, said of the quarterly performance: ‘We have made a good start to the year in Europe, where our commercial momentum remains robust, and growth accelerated across AMAP. Although competition in India remains intense, service revenues stabilised compared with the prior quarter … Overall, this performance gives us confidence in reiterating our outlook for the year.’

United Kingdom, Vodafone Group