Vodafone Group Revenues Fall on Weak Southern European Markets
Vodafone Group has reported that its second-quarter revenues fell by 7.7% compared to a year ago, hurt by sharp falls in its Southern European markets that offset growth elsewhere. Total revenue for the three months to 30th June 2012 fell to £10.77 billion (US$16.9 billion).
Group service revenue however increased 0.6%; excluding mobile termination rate cuts growth would have been 2.3%.
The company does not report quarterly profit figures.
Vittorio Colao, Chief Executive, commented "Despite the difficult market conditions, particularly in southern Europe, we continue to make progress in the key areas of data, enterprise and emerging markets, while maintaining tight control of our cost base. We remain focused on driving through significant improvements to our customers' experience through our ongoing investment in our networks, stores and IT platforms."
Germany delivered 4.2% service revenue growth driven by data, enterprise and wholesale revenue against a positive macroeconomic background. In the UK service revenue fell by -0.8% due to increased competitive activity and a weaker economy. In the Netherlands, a widespread network outage led to a service revenue decline of -1.5%. In Turkey service revenue grew by 18.7% as continued expansion of the postpaid customer base and take-up of data and enterprise services, was partly offset by increased competitive pressures.
In Italy the rate of service revenue decline was -7.7% with enterprise revenue down by 2.0%. In Spain, where the company reduced handset subsidies for new customers aimed at both reducing costs and increasing focus on customer retention, service revenue fell by 10.0%.
In Africa, Middle East and Asia Pacific (AMAP), service revenue grew by 6.1%.
In India service revenue was up 16.2%. Africa based Vodacom experienced weaker revenue growth of 1.8% reflecting increasing competition on mobile voice and data pricing. Service revenue of its Australian joint venture fell by 15.2% due to a number of factors including ongoing weakness in brand perception. The company said that it does not expect to see a significant recovery at the Australian joint venture for at least another year.
In terms of subscribers, the Group lost 1.6 million customers in its four main European markets (Germany, Italy, Spain, UK) over the past three months taking its total down to 94.75 million. The rest of Europe gained 82,000 customers, taking the customer base down to 52.2 million.
In India and Africa, the company added 7.1 million customers, but also lost 4.5 million due to inactive disconnections. The Group ended with 210.3 million customers across the two continents.
Elsewhere, the Group added 683,000 customers, and its share of Verizon Wireless contributed a further 524,000 customers.
Group wide, the company ended June with 448.8 million customers.
Net debt at 30 June 2012 of £22.7 billion (US$35.6 billion) benefited from the receipt during the quarter of the remaining consideration of £1.5 billion from the sale of SoftBank Mobile interest.
The full year outlook has been confirmed.