Vodafone UK sees decline in service revenues and profits

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The operator saw a four per cent decline in total service revenues, although data revenues grew and Vodafone Red plans “performed well”

Vodafone Group has reported revenues of £44.4 billion for its financial year ending March 2013, a 4.2 per cent decline from this time last year.

Figures for the UK show service revenue declined by four per cent, which Vodafone attributes to cuts in mobile termination rates (MTRs), increased competition and a weak economy which led to lower out-of-bundle usage.

UK voice revenues declined year-on-year, from £2.4 billion in 2012 to £2.2 billion. Data revenues, however, rose 4.2 per cent from £872 million last year to £909 million for the financial year ending March 2013.

The company said its Vodafone Red plans, which launched in September 2012 and include unlimited calls and texts, “performed well”, attracting over one million customers by the end of March.

Total revenue for the UK declined from £5.4 billion in March 2012 to £5.2 billion in March 2013.

Adjusted operating profits in the UK also fell, from £402 million last year to £294 million at the end of March.

Vodafone’s subscriber numbers fell between January and March this year, from 19.5 million to 19.2 million. At the end of March, 42.2 per cent of its base were prepaid customers.

Ovum telco strategy analyst Steven Hartley said Vodafone’s results “are a continuation of the story of the challenges facing Europe’s telcos.”

However, he said the company was “pragmatically transforming itself”, for example by assimilating Cable and Wireless globally, and signing a LTE (4G) network sharing deal with O2 in the UK.

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