Vodafone reports 5.2pc drop in its UK service revenue

Despite ‘challenging conditions’ network’s customer numbers rise by 230,000 to 19.54 million in the UK

Vodafone’s UK service revenue fell by 5.2 per cent year on year to £1.2bn according to its third quarter financial results, due to increased competition and a decrease in customers’ out of bundle usage.

Year on year the firm’s data revenue grew by 6.2 per cent to £234m, attributed to a growth in smartphone penetration.

However, voice and messaging revenue continued to fall in the quarter with voice bringing in £554m compared to £609m in the third quarter of last year and messaging revenue falling from £326m to £321m.

In the three months up to the end of December Vodafone recorded a net addition of 230,000 customers in the UK taking its total to 19.54m, of which 43.6 per cent are now on prepay. Its contract ARPU fell by 80p per month quarter on quarter to £32 and overall ARPU dropped from £20.60 in Q2 to £20.30.

The operator also reported a positive uptake of its new Vodafone Red plans with 800,000 of its customer base now on the tariffs.

Overall, Vodafone Group recorded a drop in service revenue of two per cent for the quarter, to £11.4bn

Vodafone chief executive Vittorio Colao said: “Our results continue to reflect very difficult market conditions in Europe. We are addressing this through firm actions on cost efficiency, and continuing to invest in areas of growth potential.

“We continue to make progress in our Vodafone 2015 strategy, with good revenue growth in data and emerging markets, the launch of LTE services in another four markets and the acquisition of new spectrum.

“Vodafone Red, our new strategic pricing approach in Europe, has been launched in five markets with positive early take-up, and to drive growth in enterprise we have created a new enterprise business unit and accelerated our integration plans for Cable & Wireless Worldwide.”

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