25th Jul 2014 07:57
LONDON (Alliance News) - Vodafone Group PLC Friday confirmed its outlook for the 2015 financial year, as it saw trading in line with expectations in the first quarter to end-June.
Revenue fell 4.4% on an organic basis, meaning at actual exchange rates and including costs for mergers and acquisitions, during the quarter. Excluding these costs and at constant currency, revenue rose 6.2%.
Vodafone said that its GBP19 billion Project Spring investment programme had taken off quickly, with capital expenditure nearly doubling year on year, and its 4G coverage in Europe up 20% to 52% in the last nine months.
As a result of this increased coverage, data traffic growth in Europe rose to 53% year-on-year in the first quarter from 42% in the fourth quarter of the previous year.
The company said that it was beginning to see its performance stabilise quarter on quarter in several of its European markets as the take up of new 4G services grows.
In Europe, service revenue was down 7.9% on an organic basis, as competition and regulation continued to create a challenging operating environment, it said.
Service revenue in Germany fell 4.9% on an organic basis, although improved from a 5.8% decline in the fourth quarter of the previous year. Average revenue per user is stabilising, Vodafone said, and benefiting from strong contract net additions in the second half of last year. Kabel Deutschland service revenue continued to grow strongly, the company said.
In Italy service revenue dropped 16% on an organic basis, improved from a 18% decline in the previous quarter, boosted by price rises and continued strong customer additions in its enterprise segment. Vodafone has begun its fibre-to-the-cabinet roll out in Italy. Fibre to the cabinet means laying telecommunications fibre to the main exchanges, as opposed to all the way to the house.
In the UK, service revenue was down 3.2% on an organic basis, including Cable & Wireless Worldwide. Its consumer mobile business returned to growth in the quarter, the company said, as it continued to see good traction for 4G bundled content packages.
In Spain, service revenue was down 15% on an organic basis, as revenue trends in mobile deteriorated, it said, and the market shifted towards SIM-only and mid-tier handsets in integrated bundles. Its fixed-line business continued to show strong momentum, and Vodafone said that the completion of the Ono transaction will significantly strengthen its competitive position.
Vodafone acquired Spanish cable operator Grupo Corporativo Ono SA in a EUR7.2 billion deal in March.
In Africa, Middle East and the Asia Pacific region, service revenue was up 4.7%, as it continued to see good growth across most of its markets. Particularly, in India service revenue was up 10%, down from growth of 12% in the previous quarter, as it continued to expand its M-Pesa payment service, and 3G take up continued to grow.
Organic service revenue in the Vodacom business was flat, down from 5.1% growth in the previous quarter, due to a 50% cut in mobile termination rates in South Africa in April, and intensify price competition in South Africa.
Also on Friday, Vodafone said that it has extended its voluntary tender offer for Cobra Automotive Technologies SpA by five trading days to August 1.
Shares in Vodafone were trading up 2.2% at 202.20 pence Friday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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