Vodafone growth slows despite fixed gains
Vodafone revenues slowed during the first quarter of 2018 as the operator endured a familiar tale of challenging conditions in Europe while enjoying continued growth in fixed broadband and IoT.
Group revenues fell by 4.9 per cent to €10.9 billion, with European income falling by 4 per cent to €8 billion and AMAP declining by 7.9 per cent to €2.7 billion.
The company said the slowdown was expected and said it was happy with its ‘growth engines’ of mobile data, fixed broadband, converged services and enterprise services.
Overall data traffic rose by 57 per cent to an average of 3.3GB per customer each month.
Vodafone revealed that it added a record 351,000 customers to its ‘next generation’ fixed broadband service, which is now available to 109 million homes across Europe. Vodafone also added a record 289,000 ‘converged quarters’ during the quarter.
There was growth in Germany, while Vodafone is pleased with its ongoing recovery in the UK. Revenues fell by 4.9 per cent to £1.7 billion, but much of this was attributed to a drag on handset financing as mobile service revenue dropped by 7.9 per cent. Instead it prepared to focus on the 5.2 per cent increase in fixed revenue thanks to 52,000 additions, bringing its total UK broadband customer base to 435,000.
This helped to somewhat offset ongoing challenges in Spain and Italy, as well as the ongoing popularity of SIM-Only deals, multi-SIM family deals and the abolition of EU roaming revenues that have seen ARPU reduced.
“The Group’s organic service revenue growth slowed during the first quarter, in line with expectations,” said Vodafone CEO Vittorio Colao. “Our commercial performance was solid, with further broadband market share gains in Europe, a record number of customers adopting our converged propositions, and the continued success of our world-leading IoT platform.
“The Group’s overall performance (including good progress in reducing absolute operating costs for the third year running) provides us with the confidence to reiterate our outlook for the year.”
Colao will leave his post later this year after a decade in charge, during which he has helped Vodafone survive challenges in the European market, transforming it from a pure-play mobile provider into a firm focused on converged networks.
It has invested billions through the ‘Project Spring’ network investment programme and the construction and acquisitions of superfast broadband networks. Most recently, it agreed a deal with Liberty Global to acquire cable networks in Germany, the Czech Republic, Romania and Hungary.
For it’s most recent financial year, Vodafone reported a €2.8 billion profit.