Vodafone’s quarterly mobile service revenue has dropped 1%.
The network’s trading update for Q3 2015 attributed this to a reduction in MVNO customers, after Vodafone ended its joint venture with Sainsbury’s Mobile late last year.
Vodafone reiterated that a change in regulation relating to 0800 numbers also had an impact, having previously highlighted this trend in last year’s half year results. Once a source of revenue to MNOs, calls to these numbers became free after Ofcom released proposals in 2012.
The update also showed that the mobile revenue decline was due to a fall in out-of-bundle revenue spend, meaning that fewer customers were going beyond the cap set by their contracts.
Despite the decrease in mobile revenue, post-paid adds for Vodafone increased, with the network boosting its contract customers by 94,000 in the quarter. The company attributed this growth to a strong retail performance, which saw a major in-store drive over 2015’s Black Friday and Christmas period.
Vodafone revealed in 2015 that it doesn’t generate enough cash in the UK market to sufficiently invest in the network, relying on group funds to do so. One of the reasons for this, the network said at the time, was due to stiff competition in the market.
Vodafone could find itself the smallest UK operator should Three and O2’s merger gain regulatory approval this year. Competition is already set to increase in the market after BT’s takeover of O2 was approved last month.
Vodafone CEO Vittorio Colao referred to this in the network’s trading update, stating that the company ‘continues to face regulatory and competitive challenges in many markets, but we are confident that the business is well positioned for the growth opportunities ahead.’
The network also recently re-entered talks with Liberty Global over a joint venture in the Netherlands.