Data offsets Vodafone UK’s falling voice revenues

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Vodafone shares slumped 11 per cent this morning (July 22) as it admitted revenues for the year will be hit by the "challenging operating environment".

Vodafone Group chief executive Arun Sarin said Vodafone expects revenues across all its territories for the year to March 31, 2009, to be at the low end of original forecasts in the range £39.8 billion to £40.7 billion.

Shares dropped 15.65p to 133.6p.

Sarin said: "Notwithstanding this more challenging operating environment, we continue to benefit from a diversity of assets and services, with strong revenue growth in EMAPA and another good quarter of data revenue growth offsetting weakness in Spain.

"Whilst we expect revenue around the bottom of the outlook range, our continued focus on cost reduction enables us to reiterate our operating profit and cash flow guidance for the year."

In the UK, data revenues rallied to counter a 4.4 per cent drop in voice revenues.

But Vodafone shed 27,000 customers during the quarter. Its total UK customer base now stands at 18,537, with 59 per cent on prepay. Its contract churn was up to 18 per cent, from 17.3 per cent the previous quarter and 15.9 per cent last year.

UK voice revenues for the quarter were £822 million, down from £860 million during the same period last year. Vodafone said a 7.7 per cent increase in voice usage was offset by a 9.2 per cent fall in the effective rate per minute, reflecting the continued competition in the UK market and signs of an economic slowdown.

Messaging revenues were up by more than 13 per cent from £208 million to £236 million and data revenues were up 31 per cent, from £84 million to £110 million, on the back of new broadband tariffs in February.

In total, UK revenues were up 2.1 per cent on the same period in 2007 to £1.234 billion.

 

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