Mobile phone titan Vodafone gave a cautious outlook for the year ahead, as it warned of a challenging economic environment in Southern Europe, and the impact of further regulation.

Falling revenues from Southern European operations would continue to hit the group's EBITDA margin in the company's 2012 financial year, the Chief Executive, Mr Vittorio Colao, warned on Tuesday, as the company reported a 3.2 per cent rise in revenues to £45.9 billion in its financial year 2011.

The results were weighed down by weakness in Europe, which contrasted with a particularly strong performance in India, and its South African operations, Vodacom, where service revenues benefited from increasing demand for data services.

In Spain, service revenue fell by 6.9 per cent as tough economic conditions persisted and customers opted for lower priced tariffs, while Italy also saw a decline. Greece was particularly hard hit, with service revenues falling 19.4 per cent.

“We continue to face challenging macroeconomic conditions across our southern European footprint, and we expect further regulated cuts to mobile termination rates to have a negative impact of about 2.5 percentage points on service revenue growth in the 2012 financial year,” warned the company.

The company expects growth to continue to come from data services, as the market for tablets such as the iPad takes off, and demand for smartphones continues to grow. Data revenue accounted for 12 per cent of group service revenues in the past year.

Related Topics
comment COMMENT NOW