Vodafone reports growth in UK but struggles in Europe

Mobile phone operator Vodafone has reported growth in the UK for the first time in four years, amid losses in every one of its other major European markets.

Vodafone reported a 0.9% growth in UK revenues to £1.5bn during the quarter to December 31. Mobile service revenue increased by 2% off the back of acquisition of 140 former Phones 4u stores in September.

Elsewhere, revenues in Germany, its biggest market, shrank by 1% to £1.9bn, in Spain by 8.9% and Italy by 7.4%. Despite these heavy losses, Chief Executive Colao remained positive.

“We have achieved another quarter of improving revenue trends in most of our major markets,” he said. “Growth in India has accelerated again, driven by data.

In Europe, improved commercial execution in both mobile and fixed over the last few quarters, combined with strong data demand and a more stable pricing environment, is supporting the steady recovery in the top line. Our recent cable acquisitions continue to perform well, with good progress made on integration.”

Vodafone said that it remained on target to deliver between £11.6bn and £11.9bn in earnings before interest, tax, depreciation and amortisation in 2015.

It has been a period of consolidation in the UK mobile market. BT has today confirmed its purchase of EE for £12.5bn – its first entry into the UK mobile market since spinning off O2 in 2001, which would be purchased by Telefónica for £17.7bn in 2005.

On 23 January, Three – owned by Asia‘s richest man, Li Ka-shing – was in talks buy O2 from Telefónica for £10.25bn, taking control of the UK‘s biggest mobile phone network in the process. Telefónica has also announced a deal with Sky, now the UK‘s second largest broadband provider, to launch a mobile network in the UK from 2016.

Though recent mergers in the mobile market have sparked fears that prices will be driven up by decreased competition, the more significant shift in the UK market is likely to be towards the ‘multiplay‘ bundles of telecoms and internet services more common on the continent.

Vodafone will launch a cloud-based TV service later in the UK, as it has already done in many European countries, and home broadband, making use of Cable & Wireless business fibre network which it acquired in 2011. The company currently has 19.8m mobile customers in the UK and 62,000 broadband customers.


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