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Vodafone sees revenues fall as European economic reality bites

Verizon offers a ray of hope
Thu Feb 07 2013, 16:13

MOBILE OPERATOR Vodafone suffered a decline in revenues last quarter as sales in the UK and southern Europe fell sharply.

Vodafone had seemingly been able to weather the economic storm, however the firm wasn't immune to the austerity driven downturn in Europe as the group's overall revenues fell by two percent to £11.3bn for the quarter ending 31 December 2012. The firm saw its UK revenues drop by 4.5 percent and cited increased competition and the economy as causes.

While Vodafone is suffering in Europe the firm's American operations through its stake in Verizon Wireless are paying off with revenue increasing by 8.7 percent as Verizon added more customers.

The firm talked up data usage, with its UK customers helping it record a 6.2 percent increase in revenues from data services. The firm also pointed to 4G deployments in Italy, Greece and Romania.

Vodafone CEO Vittorio Colao said, "Our results continue to reflect very difficult market conditions in Europe. We are addressing this through firm actions on cost efficiency, and continuing to invest in areas of growth potential. We continue to make progress in our Vodafone 2015 strategy, with good revenue growth in data and emerging markets, the launch of LTE services in another four markets and the acquisition of new spectrum." He continued by touting the success of Vodafone Red and said the firm has accelerated its plans to integrate Cable and Wireless, which it bought last year.

Ovum principal analyst Emeka Obiodu said Vodafone's results were expected due to the firm's traditional reliance on the European market. Obiodu said, "Given Europe's economic woes in 2012, we expect telcos that rely on Europe for the majority of their revenues to struggle. Customers feel the pinch in their pockets before they reduce their telecoms spend. The challenge for Vodafone and other European operators is to stabilize their performance and ensure that their share of the customer's wallet holds firm."

While Vodafone didn't release a profits figure for the quarter, it did issue full-year profits guidance for 2013, saying that profits should come in between £11.1bn and £11.9bn. µ


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