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Strong growth in India proved a counterweight to continued weakness in Europe for Vodafone in the quarter ending in June, the telecom giant said on Friday.
Strongest growthWhile service revenue in India rose 10.3 per cent to £1026 million – the strongest organic growth witnessed by the company in the quarter – stiff competition across Europe sent revenues lower across the region.
In Germany, revenues fell by nearly 5 per cent, while in Italy they were down over 16 per cent. The company reported flat service revenues in South Africa, which it attributed to recent regulatory changes that cut mobile termination rates in the country earlier this year. Overall group service revenue fell by 4.2 per cent.
In a statement, chief executive Vittorio Colao said that European markets had begun to stabilise, particularly as demand for 4G services across the region increased. “The year has started in line with our expectations.”
Like other telecom companies across Europe, Vodafone has faced tough competition and regulatory pressures such as limits on roaming and other charges in the region. Last year, Vodafone launched project spring, a three-year £19-billion investment programme into its network in Europe and other faster growing markets such as India and South Africa.
The company has been rolling out 4G services across Europe. Last year, it acquired German cable operator Kabel Deutschland, while this year it acquired Spanish cable operator ONO for €7.2 billion. In April, it acquired the remaining 11 per cent of Vodafone India that it didn’t already own from Piramal Enterprises for ₹8,900 crore.
The company gained 3.3 million customers in India in the quarter to June, while data usage through mobiles rose sharply – up 102 per cent.
Vodafone has also been expanding its money transfer service M-Pesa in India, particularly in rural regions, with 1.5 million registered customers and 66,000 sales agents across the country. The company maintains its position of not making any provision for its tax dispute in India.
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