11/11/2009 3:11:00 PM
Vodafone’s UK arm is ‘stabilising’
Vodafone claimed its UK arm is ‘stabilising’ after reporting its third quarter results on Tuesday (10 November).
The operator revealed service revenues were down 6.6% to £1.17bn for the quarter ended 30 September 2009 compared with £2.24bn in the same quarter last year.
The network’s revenues for the previous quarter ended 30 June were £1.18bn. It said the decline was mainly due to a reduction in mobile termination rates that became effective from July 2009.
The network gained 147,000 UK customers during quarter three, largely driven by contract and mobile data. It now has 18.7 million customers, leaving it in second place behind O2. Orange, in third place, has 16.1 million customers but is set to gain the market lead when it merges with T-Mobile.
Competitive pricing pressures and a continued reduction in active prepaid customers were partially offset by increased data revenue driven by mobile internet bundles and higher wholesale revenue from MVNOs, the company said.
Vodafone said UK EBITDA fell by 18.4% compared with the same period last year, with the EBITDA margin decreasing by 2.4 percentage points, mainly from the decline in revenue. Overall costs fell by 4.5%, due to termination rate cuts and cost efficiency initiatives.
Vodafone admitted it had been hit by customers moving to O2, which until recently held exclusive rights to the iPhone. Vodafone will begin to sell the Apple device after Christmas.
A Vodafone spokesman said: ‘The UK is stabilising – that is probably the key message.’ The Group reported a 73% surge in first half pre-tax profit to £5.7bn, with revenue up 9% to £21.8bn. India remains Vodafone’s toughest market because of an intense price war.