Turnaround hopes at Vodafone’s under-pressure European division were lifted today after signs of improved sales trends in the UK and Germany.
While service revenues were down 3.2% in the quarter to December 31, this represented an improvement on the previous quarter after the combination of new handsets and promotional offers ignited customer interest. In the UK, revenues were down by 4.9%, against the 5.7% decline reported in November.
Data revenues across the group exceeded £1bn (€1.14bn) for the first time in the quarter, helped by increased take-up of data-enabled smartphones in Europe. Today’s figures do not include the impact of Apple’s iPhone, which Vodafone started selling in the UK in mid-January.
Chief executive Vittorio Colao has been under pressure from shareholders to show he has the right strategy in place to improve fortunes in Europe, while maintaining the company’s growth rate in emerging markets.
Some shareholders are understood to be pressing for a break-up of the company if the European division cannot be revived.
Shares have lagged Vodafone’s rivals in recent months, but the trend reversed today after the stock jumped 5% in the FTSE 100 Index.
Investors were also cheered by improved results guidance, with operating profits now expected to be in the range of £11.4bn (€13bn) and £11.8bn (€13.5bn) in the year to March, up from £11bn (€12.5bn) to £11.8bn previously forecast.
This reflected a £1bn cost-cutting programme undertaken by the group in the last year.
Mr Colao, who took the helm in July 2008, said: “We are on track to deliver on our strategic priorities in the current financial year.”