Vodafone service-revenue decline slows as Europe rebounds
By Bloomberg
Vodafone Group Plc, the second-biggest mobile carrier, reported the smallest service revenue decline in 10 quarters as sluggish European markets recovered.
Service revenue, the money the Newbury, England-based company gets from customers’ plans and traffic on its network, fell 0.4 percent in the third quarter through December, Vodafone said in a statement Thursday. That was better than the average prediction of a 0.7 percent decline, based on analyst estimates compiled by Bloomberg.
Vodafone has been investing in its network and adding TV and Web services for customers across Europe to combat shrinking revenue. Chief Executive Officer Vittorio Colao is about halfway through a 19 billion-pound ($29 billion) network improvement project and has been buying cable and TV providers in his biggest markets. In the U.K., Vodafone has said it will start selling high-speed Internet access through a wholesale agreement with BT Group Plc, and will also begin a TV service this year.
In the U.K., where Vodafone is the No. 3 mobile carrier, former state phone monopoly BT has agreed to buy the biggest wireless operator, EE Ltd. The 12.5 billion-pound deal will create the biggest “quadruple play” company in the country, offering packages of mobile, Internet, home phone and TV services, and has been the catalyst for a wave of consolidation and deal talks.
Vodafone fell 0.8 percent to 234.65 pence at 8:24 a.m. in London trading, paring the advance to 5.4 percent this year. The benchmark FTSE 100 index dropped 0.6 percent.
Liberty Deal?
Vodafone is weighing its own options, including a potential tie-up with John Malone’s European broadband and TV operator, Liberty Global Plc, people familiar with the plans said in November.
Vodafone’s third-quarter revenue rose 0.7 percent, excluding the effect of deals and currency value changes, to 10.9 billion pounds. That compared with the 10.8 billion-pound average estimate of analysts in a Bloomberg survey.
The company reiterated its forecast for earnings before interest, taxes, depreciation and amortization of 11.6 billion pounds to 11.9 billion pounds for the full year ending March 30.
European service revenue fell 2.7 percent in the third quarter, better than the 5 percent drop Vodafone reported in the previous three months. That compares with a 5.9 percent gain in Vodafone’s Africa, Middle East and Asia Pacific business.
In the wake of BT’s talks with EE, Telefonica SA’s O2, the second-biggest U.K. mobile operator, is in discussions to merge with Hutchison Whampoa’s Three to create a bigger wireless company.
Sky Plc, the U.K.’s biggest pay-TV provider, said last week it’s teaming up with O2 to resell mobile services to its television customers.