Vodafone Reports Q3 KPIs

Vodafone reports organic growth of 8% for the quarter in total proportionate mobile revenue and reiterates guidance for the financial year

January 24, 2006

3 Min Read

NEWBURY, U.K. -- Vodafone Group Plc (“Vodafone”) today announces key performance indicators for the quarterended 31 December 2005. The main highlights are:

  • Good overall operating performance in challenging markets

  • Strong growth in customers with 7.1 million proportionate organic net additions, 30% higherthan for the same quarter last year. Total proportionate net additions were 8.3 million,bringing the total proportionate customer base to 179.3 million

  • Continued growth in 3G in the Christmas quarter with 3.1 million 3G devices added. Thetotal 3G device base is now 8.0 million in the Group’s subsidiaries and joint ventures and afurther 1.1 million in the Group’s associates

  • Organic growth of 8.0% for the quarter in total proportionate mobile revenue and 7.0% inproportionate mobile service revenue year on year. On a statutory basis, growth in mobileservice revenue was 5.4%, with organic growth of 4.3%

  • Vodafone reiterates its current year guidance. The Group expects organic growth for thisfinancial year in proportionate mobile revenue in the middle of the 6% to 9% range.Vodafone also expects the organic proportionate mobile EBITDA margin for this financialyear to be at the lower end of the flat to 1 percentage point lower range

  • Vodafone’s preliminary outlook for the next financial year remains unchanged



Arun Sarin, Chief Executive of Vodafone, commented:

"Vodafone has delivered a good operational performance in a challenging environment. Sales of3G devices accelerated in the Christmas quarter and we continue to see encouraging take-up ofdata services. Our major markets have seen increasing competitor activity, whilst our emergingmarket businesses have reported strong growth. We expect to deliver full year results in line withour existing guidance and our preliminary outlook for next year remains unchanged."

Vodafone Group plc (NYSE: VOD)

Group reviewVodafone saw increasing competition across Europe during the quarter, particularly in some of itsmajor markets. Verizon Wireless continues to perform well in the United States and theperformance in Japan reflects ongoing execution of its recovery plan.Strong customer growth was recorded across many of the Group’s markets during the Christmasquarter, driven by both seasonal prepaid growth and continued focus on 3G. Proportionate organicnet customer additions in the quarter of 7.1 million represents annualised quarterly growth incustomers of 16.5%.

Organic proportionate mobile service revenue growth for the quarter was 7.0% year on year, with8.0% organic growth on a total revenue basis driven by higher handset revenue from increasedvolumes. As a result, Vodafone continues to expect organic growth in proportionate mobilerevenues for the full year to be in the middle of the 6% to 9% range. Termination rate reductionscontinue to affect the performance in several businesses, most notably Italy. The estimated effectis to reduce organic proportionate mobile revenue growth in the quarter by approximately 1%, netof the benefit from the introduction of mobile to mobile voice interconnect in France.Underlying trends for service revenue, excluding the impact from changes in termination rates, inGermany, Italy and the UK saw lower growth as a result of the impact of increased competition andprice declines. Offsetting this were good performances from Spain and the US with Vodafone’semerging market operations also continuing to perform well with strong service revenue growth of39% in Romania, 36% in Egypt and 22% in South Africa.3G sales continue to develop in line with expectations, with 3.1 million net additions in the quarter,bringing the closing total to 8.0 million, including 7.4 million consumer devices. 3G net additions inthe quarter are over 80% higher than recorded in the quarter to September. Non-messaging datarevenue growth in the quarter was 24% year on year, including 53% growth outside of Japan.

Despite seeing increased competition in many of its core markets, Vodafone still expects to deliverfull year results in line with its existing guidance. The Group sees continued investment incustomers together with ongoing operating cost management and, therefore, Vodafone expectsthe full year organic proportionate mobile EBITDA margin to be at the lower end of the flat to minus1% range when compared to the previous financial year.

Vodafone Group plc (NYSE: VOD)

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