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Telco affirms full-year guidance but says competitive and regulatory challenges remain.
Vodafone reported an ongoing improvement in quarterly sales in the third quarter of its financial year, driven primarily by its operations outside Europe.
The U.K.-based mobile group posted revenue of £10.28 billion (€13.5 billion) in the three months to the end of December, up by 2.6% on an organic basis – the reported figure was down 5.5% – on the same quarter a year earlier.
Group service revenue increased by 1.4% organically to £9.17 billion, thanks to growth from its Africa, Middle East and Asia-Pacific (AMAP) operations, which saw service revenue rise by 6.5% to £2.93 billion.
Service revenue in Europe fell by 0.6% organically – and 7.1% on a reported basis – but the decline was lower than in the previous quarter. The telco’s mobile operations saw service revenue slide by 2%, but its fixed-line business in Europe reported a 3.7% increase to £1.59 billion.
Vodafone CEO Vittorio Colao said highlights for the quarter included a strong performance in South Africa and improving trends in Germany and Italy.
South Africa’s Vodacom reported 7.2% organic growth in service revenue, contributing £799 million.
Service revenue fell by 0.4% in Germany, an improvement on both the fixed and mobile sides, while in Italy it slid by just 0.3%, with a decline in the telco’s fixed and enterprise businesses offsetting a return to growth in mobile.
"With 7 million new customers in the quarter, we have maintained our good commercial momentum in mobile and are beginning to accelerate in fixed, as we launch converged services in more markets," Colao said.
Vodafone had 460.99 million mobile customers across the group at the end of 2015, the bulk – 338.94 million – being in its AMAP region, to which Vodafone India contributed 193.6 million.
Its fixed broadband customer base came in at 12.96 million, driven primarily by Germany with 5.69 million, Spain with 2.96 million and Italy with 1.91 million. Vodafone had 89,000 fixed broadband customers in the U.K., having launched full services in October.
"We continue to face regulatory and competitive challenges in many markets, but we are confident that the business is well positioned for the growth opportunities ahead," Colao said.
Vodafone confirmed its full-year guidance of £11.7 billion-£12 billion EBITDA and positive free cash flow, after all capex and before the impact of M&A, spectrum purchases and restructuring costs. Total capex will come in at between £8.5 billion and £9 billion.
