Business

Vodafone boosted by growth in Irish business

Europe’s largest broadband provider says it is on track to deliver full-year guidance

Chief executive Nick Read said Vodafone’s roaming and visitor figures had not returned to 2019 levels

Sarah Provan
Mon Jul 25 2022 - 13:20

Vodafone grew its service revenue in Ireland in the first quarter, driven by strong commercial momentum, contractual price increases in its consumer segment and an increase of 14,000 in its mobile contract customer base.

The telco’s UK business also helped drive improved performance across Europe, as it benefited from increasing customer numbers, price rises to contracts and higher roaming and visitor revenue.

Service revenue — a key metric that includes sales from contract payments, network use and roaming but not handsets — at the UK business picked up 6.5 per cent in the three months to June 30th from a year earlier, compared with 2 per cent growth in the previous quarter.

Chief executive Nick Read said Vodafone’s roaming and visitor figures had not returned to 2019 levels, before the Covid pandemic struck, but “every quarter we get more coming back”.

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“Europeans travelling within Europe are back to pre-pandemic levels,” he added, but the number of those going beyond the region had not recuperated from Covid-19.

He said Asian customers were not travelling yet “at the volume we were used to” but Americans were returning. “When people travel, they use our services more. Our volume is up.”

Overall Europe’s largest broadband provider said it was on track to deliver its full-year guidance, expecting adjusted earnings to be €15 billion-€15.5 billion before interest, depreciation, tax and amortisation.

Total group revenue in the past quarter edged up to €11.3 billion, from €11.1 billion a year earlier, Vodafone said in a statement on Monday.

However, Read warned that soaring energy prices would increase costs for the year. “The biggest inflationary pressure for Vodafone is energy,” he said on Monday.

He said the company would have to spend €100 million to hedge energy costs for the full year, on top of the €200 million it had already spent.

“But, when you see the turmoil happening around the world, we are proving to be resilient as a company, with growth in Europe and Africa,” he added. “We are reiterating our guidance range.”

The London-listed telecoms group last year pushed into the domestic broadband market and now provides 8 million UK households with full fibre broadband. It does not own a residential fixed-line network in its home market, instead leasing capacity from its rivals.

Vodafone’s shares, which trimmed an earlier 0.4 per cent slide in London trading on Monday, were unchanged from Friday. They have risen 15 per cent this year.

The group has more than 25 million customers in Europe after acquiring cable networks in markets including Germany and Spain. — Copyright The Financial Times Limited 2022

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