Mobile operator Vodafone has posted its latest financial figures, revealing that it had 0.9m customers using its 4G network by the end of June, an increase of 0.4m on the 500,000 figure from February. It now has 40% 4G coverage in the UK. Data traffic volumes grew 53% year-on-year, up from 42% growth in the previous quarter.
Vodafone said group revenue for the April-June quarter rose 6.2% to £10.2bn ($17.3bn) against market expectations of £10.35bn on a year-by-year basis. Meanwhile, group service revenue rose 6.4% to £9.446bn. In the UK market, overall revenues fell by 3.2%, which the firm blamed on several factors, including enterprise spending.
According to the financial report: 'Service revenue decreased 3.2% as consumer contract service revenue growth was offset by continued declines in enterprise, prepaid and fixed line. Mobile service revenue declined 0.6% reflecting pricing pressures in the prepaid and enterprise segments.'
Growth in areas involving cloud and machine-to-machine communications showed work on generating new revenue streams were beginning to pay off. 'We won a number of key contracts in the quarter utilising our full range of services for enterprise customers, including unified communications, fixed line, mobile, M2M [machine-to-machine], and cloud and hosting services,' said the firm.
Some of the key European markets are now showing signs of stabilisation, it reported. Revenue jumped 16.5% in Europe to £6.851bn. The operator said a slowdown in Spain and South Africa resulted in the fall in its key revenue measure. Meanwhile, improvements were recorded in the UK, Germany and Italy, where the rate of decline slowed. Vodafone said it now has 6.9 million 4G customers across Europe.
The pace of decline in organic service revenue, excluding handset sales and currency movements, accelerated to 4.2% in the quarter, compared to 4% in the same period a year ago.
Regulatory changes in South Africa meant flat growth for the Vodacom unit compared to 5.1% growth in the last quarter. Competition increased in Spain with consumers moving towards SIM-only deals; this resulted in service revenue dropping by 15.3%, compared to a 12.6% drop last quarter.
Vodafone CEO Vittorio Colao said the financial year had started in line with the company's expectations with its performance improving in markets such as Germany.
'Through our commercial actions and investment, our performance is beginning to stabilise quarter-on-quarter in several of our European markets, with customer appetite for 4G services clearly growing,' Colao said.
Kester Mann, an analyst with CCS Insight, told Mobile that the figures represented a disappointing 4G uptake for Vodafone UK. With 0.9 million subscribers at the end of June, it was less than all its UK rivals, he stressed. However, he said it was an impressive jump in data usage - up nearly 80% year-on-year and 'now the fifth highest in the group'.