Vodafone Group has reported a fall in third-quarter revenue brought about by poor performance in key markets across Europe.
In a statement issued yesterday the world’s number two mobile operator revealed its revenue in the three months ended Dec. 31 slid by 3.6% to £10.98 billion ($17.91 billion) from £11.39 billion a year earlier. The fall, however, still surpassed market forecasts of £10.86 billion.
Group service revenue, which makes up the bulk of the U.K.-based mobile giant’s top line but excludes handset sales, fell 4.8% on a comparable basis that excludes acquisitions and disposals. That compares with a 2.6% decline in the same period last year.
On the same basis, revenue from Europe fell 9.6%, with Italy and Spain down 16.6% and 14.1%, respectively. U.K. revenue fell 5.1%.
In the statement Vodafone underlines its fiscal-year guidance of adjusted operating profit around £5 billion and free cash flow in the range £4.5 billion to £5 billion. It didn’t disclose earnings figures.
Chief Executive Vittorio Colao said: ‘In Europe, conditions are still difficult, and we continue to mitigate these challenges through on-going improvements to our operating model and cost efficiency. In addition, the shift to 4G is gaining momentum and we have seen improving mobile customer net addition trends. We are therefore optimistic that our revenue performance will begin to improve as regulatory headwinds ease and customer appetite for video and content services increases.
‘During the quarter we have made further progress in executing our long-term strategy. Project Spring, our £7 billion organic investment programme, will accelerate our plans to establish stronger network and service differentiation for our customers, with the first elements of the programme already initiated. After the imminent completion of the Verizon Wireless transaction, we will be very attractively positioned, with a strong balance sheet, improved dividend cover and the financial and strategic flexibility to make further investments in the business or returns to shareholders in the future.”
Last week, Mobile reported how Vodafone’s investors voted near-unanimously to approve the landmark $130 billion sale of its 45% stake in Verizon Wireless, the biggest wireless operator in the U.S., to joint-venture partner Verizon Communications Inc. It is giving $84 billion back to shareholders in the biggest single return in corporate history.