Vodafone revenues worsen in Q3

Trading at Vodafone worsened in the third quarter as customers in previously robust northern Europe joined those in the south by cutting phone usage, adding impetus to the British group’s efforts to cut costs.

A worse-than-expected 2.6% drop in organic service revenue in the three months to Dec 31 marked an acceleration from the 1.4% fall recorded in the second quarter and showed the intense pressure on the world’s second largest mobile operator.

Telecoms firms across Europe are struggling with the macroeconomic pressures at a time when they need to build networks that offer faster speeds for consumers increasingly accessing the internet on mobile devices. They are also facing regulatory changes across the region and fierce competition.

“We expect peer results to show that Vodafone is doing worse than peers,” Bernstein analyst Robin Bienenstock said. “The pace of decline almost doubled in Europe while (emerging market) growth fell by about a third.”

Vodafone is the first major operator to report its results for the final three months of the year.

Of its 403m customers, those in Britain and Germany cut back on usage to stick within their price plans while fewer customers signed up to the network, opting for cheaper tariffs.

Smartphone usage across the Irish Vodafone base continued to grow, with the company adding 95,000 smartphone users in the quarter, an increase of 37.5% year-on-year.

The number of customers using smartphones on the network reached 972,000, representing 48% of the total mobile customer base. Vodafone Ireland’s contract base stood at 778,900, representing growth of 18,300 on the previous quarter.

— Reuters