Light Reading

Euronews: Vodafone Suffers Sales Slump

Paul Rainford
2/6/2014
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Also in today's EMEA regional roundup: UK trio launch mobile money platform; AlcaLu shifts its fortunes; Google settles search row with EC.

  • The weakness of the European market has once again proved a drag on Vodafone Group plc (NYSE: VOD)'s financials, with a year-on-year 9.65% slump in European revenues contributing to an overall revenue decline of 3.6% -- to £11 billion (US$17.9 billion) -- in its fiscal third quarter. In its AMAP (Africa, Middle East, and Asia-Pacific) business region, organic revenues grew by 5.5%, with India, which recorded 13.2% revenue growth, proving a particularly happy hunting-ground. CEO Vittorio Colao is banking on the rollout of 4G services to give its European numbers a lift and, in Vodafone's results statement, he pledged to accelerate plans to improve network infrastructure through its so-called "Project Spring." (See Vodafone Reports Fiscal Q3 and Vodafone Ups 'Project Spring' Capex to $11B+.)

  • Away from the numbers, as shouty mod-revivalists The Jam once sang, Vodafone has been teaming up with rival UK operators EE and Telefónica UK Ltd. (O2) to unveil a new mobile payments platform, Weve, reports The Guardian. Weve has the backing of Mastercard, and the partners in the project are planning to market the platform to banks, so that their customers can link to it via their respective banking apps. Last month O2 abandoned its own efforts to launch a smartphone-based "mobile wallet" in combination with Visa. (See Euronews: O2 UK Shuts Its Mobile Wallet.)

  • Alcatel-Lucent (NYSE: ALU) has settled investors' nerves and offered them evidence that Michel Combes' cost-cutting Shift Plan is working. In its fourth-quarter results, AlcaLu recorded net income of €134 million ($181 million), after accumulated losses of around €3.5 billion ($4.7 billion) in the previous six quarters. Its share price rose 9.6% on the Paris exchange in early Thursday trading on the back of the results -- its highest rise in three months. (See Alcatel-Lucent Reports Q4, Full-Year Results, Short Shift: Analyst Doubts AlcaLu's Cost-Cutting Ability, Alcatel-Lucent to Raise $2.7B, and Alcatel-Lucent to Cut 10,000 Jobs.)

  • Google (Nasdaq: GOOG) has successfully placated the European Commission competition authorities and avoided a hefty fine by agreeing to modify the way it presents its search results, reports the Daily Telegraph. Google has agreed that when it uses search results to promote its own services, it must show results from three rivals in a "comparable" way. Its rivals, though, are not happy that Google has managed to persuade European Commission decision-makers that all is in order.

  • Despite seeing a strong growth in the take-up of its pay-TV service, Swisscom AG (NYSE: SCM) recorded a 6.6% fall in net income to 1.69 billion Swiss francs ($1.86 billion) in its full-year results. It has not been the happiest of years for Swisscom -- last July its then CEO, Carsten Schloter, committed suicide, leaving a company in shock and in need of fresh leadership. (See Swisscom Reports Full-Year Results and Swisscom CEO Found Dead.)

  • The German government is looking into selling some of its shares in Deutsche Telekom AG (NYSE: DT), according to a Reuters report. The state currently holds a 31.9% stake in the operator.

  • Interoute Communications Ltd. , the pan-European cloud services provider, has opened a new distributed datacenter in Madrid. The new facility is integrated with Interoute's datacenters in other major European cities, including Paris, Amsterdam, London, and Berlin.

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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    Gabriel Brown
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    Gabriel Brown,
    User Rank: Light Sabre
    2/6/2014 | 9:42:51 AM
    ALU
    I haven't looked at ALU results yet, but in LTE and mobile core (segments I cover), it had a good 2013 on the back of North American spending.

    It'll be interesting to see how sustainable the US mobile capex is in 2014, and what the impact of Chinese LTE capex will be.
    Gabriel Brown
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    Gabriel Brown,
    User Rank: Light Sabre
    2/6/2014 | 9:38:42 AM
    Vodafone
    Vodafone is a good proxy for the European mobile sector. A 10 percent decline in european services revenues, on top of declines last quarter, is not pretty. And it's not just the impact of MTRs any more (although that is still a factor).
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