Vodafone reports not bad Q1

Vodafone has stated its first quarter results for 2011 have resulted in a small rise in group revenue, up by 3.5% to £11.660 billion.

Group data revenue is up 24.5% at £1.5 billion, and European smartphone penetration sits at 19.5%.

Vittorio Colao, chief executive, commented: “We have made a good start to the year, reporting robust results despite challenging macroeconomic conditions across southern European economies and the impact of cuts to mobile termination rates. Revenue from our key focus areas of data, enterprise and emerging markets continues to grow strongly. With our broad geographical mix and improving market positions, we are well placed for the rest of the financial year.”

Group revenue increased by 3.5% to £11.7 billion and group service revenue increased by 1.5% to £10.9 billion. Excluding the impact of mobile termination rate (‘MTR’) cuts, Group service revenue increased by 3.9%.

Europe service revenue declined by 1.3%, a 0.5 percentage point deterioration compared to the growth rate experienced in the previous quarter. Excluding the effect of MTR cuts our businesses in Northern Europe continued to grow strongly with Germany at 4.0% (including MTR cuts: +0.2%) and UK at 5.3% (including MTR cuts: +1.7%).

Macroeconomic challenges continue to dominate the performance of the businesses in Southern Europe. In Italy service revenue fell by 1.5%. Spain saw organic service revenue decline by 9.9%, with price reductions adding to ongoing macroeconomic pressures.

In Africa, Middle East and Asia Pacific (‘AMAP’) service revenue grew by 8.7%, 3.1 percentage points lower than the previous quarter which was primarily due to the inclusion of Vodafone Hutchison Australia (‘VHA’) within the organic growth definition for the first time. Businesses in Vodafone’s major markets continued to grow strongly with India (+16.8%) continuing to see a more stable pricing environment and Vodacom (+7.8%) continuing to lead the South African market in mobile data. Other AMAP growth slowed to 1.5% largely due to VHA suffering from revenue declines following network difficulties and MTR cuts impacting revenue in New Zealand.

Data revenue grew by 24.5% to £1.5 billion, representing 13.7% of group service revenue. Increasing smartphone penetration is driving greater mobile internet usage across our businesses, with growth in mobile internet revenue of 44.2% in Europe and 52.7% in AMAP.
Enterprise revenue grew by 1.7% comprising growth of +0.7% in Europe and +12.9% in AMAP. Data revenue within this segment increased to 21.2% of enterprise service revenue due to higher smartphone penetration and internet usage. Vodafone Global Enterprise’s momentum continued with new contract wins and 4% growth in service revenue.

Messaging revenue of £1.3 billion grew by 5.3%, including 6.9% growth in Europe.
Fixed revenue of £0.9 billion grew by 6.4%(*) to represent 8.3% of Group service revenue. The company now has 8.6 million fixed customers including 6.2 million fixed broadband customers.

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