Smartphones continue to drive Vodafone growth
Network adds 23,000 customers in one quarter but average revenue falls
The Vodafone Group reported quarterly service revenue that fell as a price war in Germany compounded a three-year slump in southern Europe. Photograph: Chris Ratcliffe/Bloomberg
Smartphones continued to drive growth at Vodafone’s Irish divison, as the number of customers using the devices on the network rose by 27 per cent year on year.
But although Vodafone Ireland increased the number of customers in its contract customer base by 8.2 per cent, gaining it 23,000 new customers, average revenue per user continued to decline, falling by 2.8 per cent on the previous quarter to €29.20.
The company now has a total of 2.4 million customers, with 2.1 million mobile subscribers.
The network has continued to invest in its network in recent months, improving voice and data coverge for mobile customers in the southeast of the country. Vodafone Ireland is also working on rolling out 4G servcies to customers.
According to Vodafone Ireland, 65 per cent of its customers now use mobile data on their devices, a figure that covers phones, tablets and notebooks. That represents a rise of 20.5 per cent year-on-year.
The company also increased its fixed line customers by 2.9 per cent year on year, and launched fibre-powered broadband in the quarter, bringing high speed broadband to customers in certain areas.
A new enterprise customer solutions division was also added to the Vodafone Ireland, aimed at providing complex integrated telecommunications services for business customers from one provider. It has already secured a deal to supply a managed high speed fixed data network to Government departments and public sector agencies in a bid to improve public services and increase efficiency.
On a group-wide basis, Vodafone reported quarterly service revenue that fell as a price war in Germany compounded a three-year slump in southern Europe. Service sales excluding currency swings and acquisitions decreased 3.5 per cent in the three months through June, the fourth consecutive quarterly decline.
The German unit, which is Vodafone’s biggest and accounts for almost a fifth of revenue, reported a 5.1 per cent drop in service sales.
The carrier is bulking up in Germany, bidding €7.7 billion to buy the largest cable company, Kabel Deutschland Holding, as it seeks to add bundled services across Europe by combining phone, web and TV to increase customer loyalty and stabilize prices.
“Underlying trends have slipped in our view as German competition rises and Italian pricing becomes even more brutal,” Nick Lyall, an analyst for UBS AG, wrote in a note to investors ahead of the results.
Vodafone’s 45 per cent stake in Verizon Wireless, the largest US mobile-phone company, accounts for about half of its adjusted operating profit. Majority owner Verizon Communications, which reported a 4.3 per cent growth in revenue yesterday, is interested in buying out Vodafone’s share this year, people familiar with the matter said in March. A deal could win Vodafone $120 billion or more, analysts have said.
Chief executive Vittorio Colao is reducing Vodafone’s reliance on lagging European markets with investments in higher growth markets such as India, South Africa and the US Vodacom, Vodafone’s African business, yesterday reported a 3 per cent increase in quarterly revenue as more customers switched to smartphones.
Additional reporting - Bloomberg