Vodafone Ireland sees marginal decline in service revenue

Service revenue declined by 0.1 per cent at Vodafone Ireland during the first quarter, the group said on Friday.

Vodafone Ireland saw growth in the consumer contract and enterprise mobile businesses and in fixed line subscriptions but said this was offset by a decline in prepaid mobile.

Meanwhile, the group’s parent added 3.4 per cent to its share price in early morning trading in London after reporting service revenue that topped estimates.

The stock has gained 6.1 per cent so far this year and the company currently has a market capitalisation of £62.7 billion.

Commenting on the quarterly results, Vodafone Ireland chief executive Anne O’Leary said: “We are satisfied with our performance this quarter with increases in both our mobile and fixed customer bases contributing to improving revenue trends. Our investment strategy is creating a superior network for voice and data, and is positioning Vodafone as Ireland’s leading total communications provider which is underpinning our improving performance.

The Vodafone Group reported an acceleration in its main quarterly sales growth as a cable TV acquisition in its biggest market Germany helped to lift sales and consolidate an overall return to growth for the British firm.

Total sales rose 3.3 per cent in the quarter to £10.1 billion. Service revenue in the UK rose 0.2 per cent, while Europe as a whole grew 1.5 per cent to £5.97 billion.

The world’s second-largest mobile operator, which reported a return to quarterly sales growth for the first time in nearly three years in May, has been hit hard by the constraints on consumer spending in its big European markets, fierce competition in India and by regulator-imposed price cuts around the world.

On Friday it said first-quarter organic service revenue grew 0.8 per cent, ahead of the 0.1 per cent it recorded in the previous three months. That was slightly ahead of forecasts, with analysts expecting growth of around 0.5 per cent.

"Our emerging markets have maintained their strong momentum and more of our European businesses are returning to growth, as customer demand for 4G and data takes off," chief executive Vittorio Colao said.

Vodafone said organic sales in Germany, where Vodafone is battling against the incumbent Deutsche Telekom, were down 1.2 per cent, compared with the 3.5 per cent fall in the fourth quarter, but that was helped by the inclusion of its Kabel Deutschland TV business.

Vodafone’s British market returned to growth while Italy also showed signs of stabilising.

The improvement in trading helped the group to reiterate its outlook for the full year.

Additional reporting: agencies