The rise was driven by strong growth in the company’s business and consumer segments, which was partially offset by lower fixed wholesale revenue.
The UK accounts for 15 per cent of the group’s total revenue.
Vodafone Business service revenue climbed by 5.8 per cent over the same period, boosted by strong growth in IoT and higher project revenue. That compares with 3.2 per cent growth in the second quarter of 2023.
The results follow the company’s announcement in August 2023 that it will be providing connectivity for Britain’s smart meter network through its partnership with Data Communications Company.
The company increased its contract customer base by 18,000 as a result of strong seasonal trading. Consumer contract retention also improved by 0.8 percentage points year-on-year. Additionally, its digital sub-brand Voxi continued to grow, adding 26,000 customers during the quarter.
The company also increased its broadband customer base to 1.3 million, with the addition of 39,000 customers in Q3. Through its partnerships with CityFibre and Openreach, Vodafone said that it can now reach more than 14.5 million households with full-fibre broadband.
As a group, Vodafone’s service revenue increased 4.7 per cent in Q3, versus 4.7 per cent in Q2 2023. Its group business service revenue also grew 5 per cent in Q3 (4.3 per cent in Q2), driven by a strong performance in digital services.
The company also reiterated its guidance for the full year end March 31. It expects adjusted EBITDA of around €13.3 billion and adjusted free cashflow of around €3.3 billion. Last year, Vodafone reported EBITDA of €14.7 billion and revenue of €45.7 billion.
Vodafone said that it expects to close its merger with Three UK around the end of 2024, subject to regulatory and shareholder approvals. Once completed, Vodafone will own 51 per cent of the combined business and CK Hutchison 49 per cent. The deal will enable increased investment, with a £11 billion plan to create one of Europe’s most advanced standalone 5G networks.
Margherita Della Valle, Vodafone Group chief executive, said, “We maintained good service revenue momentum in the third quarter across both Europe and Africa, supported by a further acceleration of Vodafone Business, with our Cloud and Internet of Things services growing over 20 per cent.
“We’ve made good strategic progress in the first nine months of the year, with improving customer satisfaction and three consecutive quarters of service revenue growth in Europe. Our announced transactions in the UK and Spain are progressing well, and we are in active discussions in Italy. We’ve also begun strategic partnerships with Microsoft and Accenture to fast-track our transformation.”