Vodafone UK returns to growth in third quarter results

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4G coverage hits 57 per cent as benefits of its £1 billion Project Spring infrastructure spending begins to take effect

Vodafone UK posted revenues of £1.53 billion for the three months ending December 31, a year-on-year rise of 0.9 per cent (2013: £1.52 billion).

The UK’s third largest operator had seen revenue dip by three per cent during its second quarter but a two per cent increase in mobile revenue helped Vodafone’s UK turnover revenue increase.

Vodafone added 76,000 consumer customers and ended the quarter with 2.4 million subscribers using 4G. Overall, it added 185,000 connections in the UK during the three months, giving it an overall base of 19.8 million. Pre-paid customers made up 40.2 per cent of its overall connection base.

In-bundle payments increased during the quarter, up from £628 million in 2013 to £649 million in 2014. Out of bundle spend fell from £317 million to £315 million, with revenue generated from mobile incoming also falling, from £95 million to £91 million.

Vodafone’s fixed line base grew by 2,000 customers from 62,000 to 64,000, but fixed line revenue fell by two per cent to £400 million (£408 million in Q3 2013). Dropped call rates fell from 0.94 per cent in the prior quarter to 0.86 per cent.

Vodafone CEO Vittorio Colao said: “We have achieved another quarter of improving revenue trends in most of our major markets. Growth in India has accelerated again, driven by data. In Europe, improved commercial execution in both mobile and fixed over the last few quarters, combined with strong data demand and a more stable pricing environment, is supporting the steady recovery in the top line. Our recent cable acquisitions continue to perform well, with good progress made on integration.

“Our Project Spring investment programme is well advanced, with 4G coverage in Europe now 65%, dropped call rates down to 0.64%, and 26 million homes now passed by our own next generation networks: our customers are really beginning to notice the difference in experience that this investment delivers. We are confident that, over time, this will translate into further improvements in customer perception, ARPU and churn.”

Vodafone Group revenue falls 0.4 per cent

Overall Group service revenue declined by 0.4 per cent to £9.7 billion ( year-on-year, with 2.7 per cent less revenue in Europe. Vittorio-Colao-web

Vodafone confirmed its full year guidance of earnings before interest, tax, depreciation and amortisation between £11.6 billion and £11.9 billion.

Capital expenditure for the quarter increased year-on-year by 39.2 per cent to £2.1 billion as Vodafone accelerated its Project Spring investment programme.

Vodafone said its 4G network now covers 65 per cent of the European population, with 13.7 million customers using 4G across the 18 markets it is available in. The results revealed that 4G traffic now makes up 26 per cent of all Vodafone’s data traffic across Europe, compared with 17 per cent in the previous year.

Project Spring, which is Vodafone’s £20 billion investment in improving infrastructure across the Group, has now seen 61,000 mobile sites modernised, with an additional 86,000 added since the project began in November 2013.

As of December 31, Vodafone has a net debt of £22.3 billion, an increase £500 million during the quarter.

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