& cplSiteName &

Vodafone Reports Fiscal Q3

Light Reading
News Wire Feed
Light Reading
2/6/2014
50%
50%

NEWBURY, UK --

Highlights

  • Q3 Group organic service revenue declined 4.8%; Europe down 9.6%; AMAP up 5.5%
  • Strong emerging market service revenue growth: India 13.2%, Turkey 3.9%, Vodacom 3.5%
  • Conditions in Europe remain challenging; organic service revenue: UK -5.1%, Germany -7.9%, Spain -14.1%, Italy -16.6%
  • 9.8 million customers now on Vodafone Red: well on target to achieve 11-12 million customers by March 2014
  • 4G available in 13 countries, data usage double that of 3G plans, around 2 million 4G Red customers in Europe
  • Project Spring under way and on track
  • Unified communications: Portugal fibre build on track; Spain commercial launch in April
  • Acquisition of 76.6% of Kabel Deutschland (‘KDG’), domination agreement process on-going
  • US$130bn sale of US Group, including its interest in Verizon Wireless, expected to complete 21 February 2014
  • Net debt including joint ventures increased to £31.5 billion after the acquisition of 76.6% of KDG
  • Full year guidance confirmed2: adjusted operating profit around £5.0 billion; free cash flow £4.5 – £5.0 billion

    Vittorio Colao, Chief Executive, commented: “Our emerging market businesses are growing strongly, supported by consistent execution and accelerating demand for data. In Europe, conditions are still difficult, and we continue to mitigate these challenges through on-going improvements to our operating model and cost efficiency. In addition, the shift to 4G is gaining momentum and we have seen improving mobile customer net addition trends. We are therefore optimistic that our revenue performance will begin to improve as regulatory headwinds ease and customer appetite for video and content services increases.

    “During the quarter we have made further progress in executing our long-term strategy. Project Spring, our £7 billion organic investment programme, will accelerate our plans to establish stronger network and service differentiation for our customers, with the first elements of the programme already initiated. After the imminent completion of the Verizon Wireless transaction, we will be very attractively positioned, with a strong balance sheet, improved dividend cover and the financial and strategic flexibility to make further investments in the business or returns to shareholders in the future.”

    Group overview
    Group revenue for the quarter declined 3.6% to £11.0 billion, including a 2.1 percentage point impact from adverse foreign exchange movements and a 2.8 percentage point positive impact from M&A and other activity. On an organic basis, Group service revenue decreased 4.8% or 2.4% excluding the impact of mobile termination rate (‘MTR’) cuts. Emerging markets continued to generate strong organic growth supported by rapidly increasing mobile internet users and data usage. The environment in Europe remains challenging and we have continued to experience intense macroeconomic, regulatory and competitive pressures in the quarter.

    Our new organisational reporting structure is now effective, with Northern and Central Europe and Southern Europe merged into one Europe region. Vodafone Turkey is now reported within the AMAP region.

    In Europe organic service revenue fell 9.6% in the quarter, or 7.0% excluding the impact of MTR cuts. Performance across the region remained under pressure mainly due to continued price competition. In Germany service revenue declined 7.9%, reflecting strong price competition in both consumer and enterprise. However, increased customer investment in the quarter resulted in improved customer additions. UK service revenue declined 5.1% due to price competition, particularly in prepaid and enterprise. Good progress has been made on 4G, with over 370,000 customers on 4G plans since launch in August. In Italy, service revenue declined 16.6% driven by further macroeconomic weakness and aggressive price competition. Price competition in the prepaid market became less intense following the conclusion of the summer promotional period. Spanish service revenue fell 14.1%, an improvement from the previous quarter, driven by increased contract and fixed broadband net additions, supported by our convergent offer.

    Organic service revenue in AMAP grew 5.5% in the quarter, with continued strong revenue growth across the majority of our markets. In India service revenue grew 13.2% driven by a higher customer base, improved voice pricing and strong data growth. Mobile internet users in India increased 38% in the quarter to 45.7 million and data usage continues to grow strongly with 3G usage now averaging in excess of 700MB per month. Vodacom Group service revenue grew 3.5%, with South African service revenue growth improving to 0.6% following a successful summer campaign. Service revenue in the Vodacom International businesses grew 15.1%. Vodafone Turkey continued to grow strongly at 3.9% or 11.0% excluding voice and SMS MTR cuts. Our joint venture in Australia reported a service revenue decline of 8.0%. However, network performance and customer satisfaction have improved strongly in recent months. In Egypt service revenue grew 1.1%, improving from the previous quarter’s 0.8% decline, as customer usage trends improved following the removal of the curfews.

    Free cash flow of £1.0 billion in the quarter was £0.2 billion lower year-on-year due principally to increased capital expenditure. Net debt including joint ventures was £31.5 billion, an increase of £5.8 billion in the quarter following the acquisition of 76.6% of KDG for £7.0 billion including acquired debt. Net debt excluding joint ventures was £29.8 billion.

    Capital expenditure of £1.8 billion was £0.3 billion higher than the prior year due to the accelerated phasing of investment. Incremental investment for Project Spring of £0.5 billion is expected within the current financial year, with the cash outflow taking place in the 2015 financial year.

    We have continued to make progress with our Vodafone 2015 strategy. 9.8 million customers are now on Vodafone Red plans, and we remain on track to meet our upgraded target of 11-12 million customers by March 2014. Mobile in-bundle revenue has grown 6.6% in the quarter and now represents 49% of Group mobile service revenue, and 59% in Europe. Our 4G services are now available in 13 countries and we now have around 2 million 4G Red customers in Europe. Data consumption has increased significantly, with customers using on average double the amount of a 3G plan. Group data usage grew 64% year-on-year, with Europe up 44%, and AMAP up 110%.

    Our daily roaming proposition now has 10.9 million registered customers, accounting for more than 20% of consumer contract and 15% of enterprise roaming customers. We have successfully launched our fully integrated payment services, mWallet and Smartpass, in Germany and Spain and expect to rollout to the UK, Italy and the Netherlands by the end of the year.

    Vodafone Global Enterprise, which serves our biggest multi-national accounts, grew 4.5%. We won several new contracts including Premier Foods for a fully integrated communications platform. In machine-to-machine (‘M2M’) revenue grew 30% and we continued to maintain our market leading position having been ranked number one5 again for M2M excellence. The integration of both Cable and Wireless Worldwide (‘CWW’) and TelstraClear remain ahead of our business plans.

    Vodafone Group plc (NYSE: VOD)

    (0)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    From The Founder
    Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
    Flash Poll
    Live Streaming Video
    Charting the CSP's Future
    Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
    LRTV Custom TV
    CommScope – Meeting the Demands of Tomorrow's Networks

    3|24|17   |     |   (0) comments


    Phil Sorksy, Vice President International at CommScope, discusses addressing the challenges faced by service providers today, and as future trends emerge.
    LRTV Huawei Video Resource Center
    AMS-IX & Huawei's OSN 902

    3|24|17   |     |   (0) comments


    Huawei shows how its OSN 902 platform helps the Amsterdam Internet exchange to connect the world using multiplexing.
    LRTV Huawei Video Resource Center
    Huawei's Smart Energy Innovation Center

    3|24|17   |     |   (0) comments


    In Nuremberg, Huawei showcases its latest capabilities in the digitalization of Internet resources, network infrastructure and intelligence at its Smart Energy Innovation Center.
    Valley Wonk
    OFC & Hyperscale: A Good Mix?

    3|24|17   |   01:50   |   (0) comments


    Cloud and telecom players want different types of equipment for their networks, as the chatter at OFC reveals.
    LRTV Custom TV
    Etisalat on NFV Journey

    3|24|17   |   10:37   |   (0) comments


    Etisalat is a service provider that prides itself on bringing innovative technologies to the markets it serves. It was one of the first operators to implement 3G and leads the pack in fiber penetration. Now, Esmaeel Al Hammadi, Etisalat's SVP of Network Development, explains the operator's journey to virtualization, beginning with the network core, as well as the ...
    LRTV Huawei Video Resource Center
    Huawei at CeBIT 2017: Day 3

    3|22|17   |     |   (0) comments


    Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting on the application of technologies and key business verticals such as transportation, smart city, manufacturing, media and finance.
    LRTV Documentaries
    No Regrets: Cox's Finkelstein on Fiber & More

    3|22|17   |     |   (0) comments


    At the Cable Next-Gen Technologies & Strategies event in Denver, Cox's Jeff Finkelstein examines the cable capex conundrum.
    LRTV Documentaries
    Cable Next-Gen: The 'Mile High' View From Denver

    3|22|17   |   11:56   |   (0) comments


    Alan Breznick kicks off the Cable Next-Gen Technologies & Strategies event in Denver, casting his thousand-yard stare over cable's current competitive landscape.
    LRTV Huawei Video Resource Center
    Huawei at CeBIT 2017: Day 2

    3|21|17   |   2:27   |   (0) comments


    Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting digital transformation solutions around IoT, smart data centers, OpenCloud ecosystem and its newly announced storage-as-a-service solution.
    LRTV Custom TV
    Driving Better Mobile Customer Experience While Transforming the Mobile Network

    3|21|17   |   7:47   |   (0) comments


    The Citrix NetScaler mobile gateway is an intelligent traffic management solution which can markedly improve the customer experience provided by mobile operators, even when traffic is encrypted. Critical network services can be consolidated and virtualized using NetScaler. Because of the unique architecture, NetScaler can be deployed on any hypervisor, on a ...
    LRTV Custom TV
    Mastercard: What's Next for Mobile Payments?

    3|21|17   |   7:49   |   (0) comments


    2017 marks the fifth consecutive year for Mastercard at Mobile World Congress and it was a great time to reflect on the amazing advances the payments industry has made as well as discuss "What's Next' in the digital commerce future. We spoke to James Anderson, executive vice president of digital payments at MasterCard, about digital wallets to tokenization to ...
    LRTV Custom TV
    Mastercard: 2 Billion Adults 'Trapped' in Cash Economy

    3|21|17   |   03:51   |   (1) comment


    Despite advances made in the last several years, two billion adults around the world are trapped in a cash economy and lack what we take for granted -- a safe way to receive, save and use money. Shamina Singh, executive vice president of sustainability and president of the Mastercard Center for Inclusive Growth, chats about how Mastercard is developing new ways to ...
    Upcoming Live Events
    May 15-17, 2017, Austin Convention Center, Austin, TX
    May 15, 2017, Austin Convention Center - Austin, TX
    June 6, 2017, The Joule Hotel, Dallas, TX
    All Upcoming Live Events
    Infographics
    With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
    Hot Topics
    High-Band 5G: Let's Address the Range Question, Shall We?
    Dan Jones, Mobile Editor, 3/21/2017
    Eurobites: A1, Nokia Turn It Up to 11
    Paul Rainford, Assistant Editor, Europe, 3/22/2017
    FTTH No Slam Dunk for Cable
    Carol Wilson, Editor-at-large, 3/23/2017
    Welcome to the Wild West of Privacy
    Carol Wilson, Editor-at-large, 3/24/2017
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
    At MWC 2017, Qualcomm's CTO Matt Grob talks to Light Reading's CEO and Founder Steve Saunders about the progress being made in the development of the technologies and standards that will underpin 5G.
    Animals with Phones
    Neither Do We Click Here
    Is that a prerequisite?
    Live Digital Audio

    Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.