Vodafone Quarterly Revenue Declines

(RTTNews) - British telecom giant Vodafone Group Plc (VOD, VOD.L) Friday reported a decline in revenues for its first quarter, citing mainly difficult economic environment, high unemployment and increased competitor activity in Europe. Looking ahead, the company said regulation, competitive pressures and weak economies, particularly in Southern Europe, continue to restrict revenue growth.

Vodafone, however, reported continued strong service revenue growth in emerging markets and confirmed its outlook for the 2014 financial year.

Vittorio Colao, chief executive of the company stated, "We have made a good start to the year in our areas of strategic focus: growth in emerging markets has accelerated, we now have over 5 million customers benefiting from Vodafone Red, and 4G is live in ten markets."

Vodafone said the proposed acquisition of German cable operator Kabel Deutschland (KBDHF.PK) will create an excellent platform for its unified communications strategy. The transaction is expected to close in the fourth calendar quarter of 2013.

In an interim management statement, the company said Group service revenue, including joint ventures, declined 3.5 percent to 10.16 billion pounds, on an organic basis. Revenues were down 1.3 percent, excluding joint ventures. Including joint ventures, Group revenue amounted to 11.1 billion pounds.

In Northern and Central Europe, service revenue increased 8.9 percent, and recorded a 3 percent decrease organically.

The company noted that conditions in Southern Europe remained difficult, with a decline of 17.6 percent in Italy and 10.6 percent fall in Spain, on an organic basis. Southern Europe service revenue including Italy fell 14.4 percent from last year.

Service revenue in Turkey climbed 15.5 percent, while in the Netherlands service revenue dropped 3.7 percent. Service revenue in India climbed 13.8 percent organically. Vodacom's service revenue improved 3.2 percent, driven by growth in Vodacom's mobile operations outside South Africa.

Enterprise business, which accounts for 27.4 percent of Group service revenue including joint ventures, service revenue fell 4.6 percent.

Verizon Wireless (VZW), the company's US associate, continued to perform strongly and service revenue increased 7.2 percent. In the U.S., Verizon Wireless added 1.0 million net retail connections during the quarter, bringing the closing mobile retail connections base to 100.1 million, up 6.3 percent from last year.

Mobile customers of the Group as at June 30, 2013 was 408,577 thousands, up from 403,875 thousands at April 1, 2013.

In London, Vodafone shares are currently trading at 192.15 pence, up 0.80 pence or 0.42 percent, on a volume of 10.34 million shares. In US, VOD closed Thursday's regular trading at $29.12 on the Nasdaq.