|
 The world's second biggest mobile phone company has spent billions
of pounds on its networks over the past two years and can now offer
faster 4G services to 80 percent of its customers in Europe when the
economic climate is steadily improving.
Chief Executive Vittorio Colao said Vodafone's underlying service
revenue grew in seven out of 13 European markets in the first half,
with southern Europe in particular showing a strong rate of
recovery.
"We have reached an important turning point for the group with a
return to organic growth in service revenue and EBITDA (core
earnings) in the first half," Colao said.
Vodafone shares rose 5 percent to an eight-week high of 225 pence by
0547 ET after the first increase in first-half earnings since its
2011-12 financial year.
Vodafone's core earnings, or earnings before income tax,
depreciation and amortization (EBITDA), for the six months to the
end of September rose 1.9 percent to 5.79 billion pounds, beating
analyst expectations of 5.69 billion.
Underlying second-quarter service revenue, on a like-for-like basis
and stripping out currency changes, climbed 1.2 percent, better than
a 0.8 percent rise in the first quarter and above the 0.9 percent
analysts were expecting.
Colao said markets remained competitive, however, and while the
trend in Europe was improving, service revenue there still fell in
the three months to the end of September.
The company said it now expects full-year earnings to come in
between 11.7 billion and 12.0 billion pounds, raising the floor of
the forecast range from 11.5 billion.
Analysts at Jefferies, calling the numbers "encouraging", said
Vodafone still envisaged improving service revenue trends in the
second half, and it sounding notably confident of improvement in
Germany.
MOBILE, INTERNET AND TV
Investors are looking closely at Vodafone's performance in markets
such as Germany, Spain and Britain after its talks with cable
operator Liberty Global about an exchange of assets were abandoned
in September.
With the Liberty talks dropped, Colao said Vodafone would continue
to develop its own services combining mobile, broadband and TV
content in Spain, Portugal, Italy and Germany.
[to top of second column] |
Colao said Vodafone's mobile networks were at least as good as
European rivals but former monopolies such as BT and Deutsche
Telekom had an unfair advantage in being able to use old copper
technology, which was often funded by tax-payers, when rolling out
combined services.
"There is a clear agenda on the part of these companies to undo 30
years of customer choice, re-establish their former monopolies and
make it very difficult for other players to compete," he said.
BT has been cleared to buy leading mobile operator EE, which will
result in owners Orange from France and Deutsche Telekom holding
stakes in the former British monopoly provider.
Colao said European regulators needed to favor investment in fiber
networks and to consider imposing stronger operating conditions on
the owners of legacy networks.
Taking into account currency movements, Vodafone said growth in the
period was dampened. It said it would start reporting in euros
rather than sterling from the 2017 financial year, a move it said
was logical as half of its revenues were in euros.
It also reiterated it had started preparations to float its Indian
unit, potentially in its next fiscal year, Colao said.
(Editing by David Clarke)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
