Vodafone on Tuesday posted a return to quarterly service revenue growth in a set of financials that suggest an uptick in the European telecoms market.
The mobile group posted revenues of £10.59 billion in its fiscal fourth quarter, an increase of 2.6% on an organic basis, while service revenues improved by 0.1% organically to £9.57 billion.
Growth was driven by the telcos’s Africa, Middle East and Asia Pacific business, which reported a 6% increase in service revenues to £3.14 billion.
In Europe service revenues fell by 2.4% compared with the year ago quarter to £6.26 billion. However, the decline was slower than in previous quarters and significantly better than the 7.6% decline the telco posted in Q4 last year.
"We have seen increasing signs of stabilisation in many of our European markets, supported by improvements in our commercial execution and very strong demand for data," said Vodafone CEO Vittorio Colao.
The improving trend in Europe mirrors results posted by Vodafone’s rivals in recent weeks.
Deutsche Telekom posted a solid set of quarterly numbers last week, including revenue growth in its home market. And while Latin America is still driving growth at Telefonica, the Spanish incumbent posted revenue growth in Germany and a slower quarterly decline at its domestic operations.
"We have significant opportunities ahead of us, with only 13% of our European mobile customers using 4G, and our market share in fixed services only a fraction of our share in mobile," said Colao. "In addition, businesses around the world are increasingly looking to put mobility at the centre of their own strategies."
Vodafone had 20.2 million 4G customers across 18 markets at the end of March, while data volumes grew b y 81% on-year in the quarter. Its total mobile customer base came in at 445.84 million on the back of 4.76 million net adds during the quarter.
It had 12.05 million fixed broadband customers, an increase of 289,000 during the quarter. 11.28 million of the total were in Europe, including 5.45 million in Germany, 2.81 million in Spain, and 1.8 million in Italy.
For the full year Vodafone reported revenues of £42.23 billion, down by 0.8% organically, while EBITDA fell by 6.9% to £11.92 billion. Net profit came in at £5.76 billion, compared with £59.25 billion the previous year.
It ended the reporting period with net debt of £22.27 billion. That figure was better than expected, said MUFG analyst Rick Mattila, but he warned that "debt levels are likely to remain elevated in the 2016 financial year, given the continuing capex relating to Project Spring (its £19 billion network investment programme), due outgoings on the Indian spectrum auction and a likely participation in the German spectrum auction."
