Vodafone boosted by emerging markets
Vodafone issued reassuring quarterly revenue figures, with emerging markets compensating for weakness in developed countries.
The group added 8m new customers during the period, bringing the total to 315.3m.
The European operation benefited from foreign exchange trends with service revenue up 4.4%. Organic service revenue dipped 4.4% with the group blaming economic problems and mobile termination rates. It has built expectations of further weakness, particularly in the UK, into its full year revenue projections as lower roaming prices and termination rates take their toll.
With the exception of Central Europe, it was emerging markets that buoyed overall revenues. The Africa and Central Europe region reported revenue up 26.3%, including the Vodacom acquisition. Service revenue in India rose 14.3%..
The group’s cost reduction programme is on track. It is targeting £1bn in overall savings, of which 65% should be realised by the end of the year.
Vodafone said that its guidance remained the same as given in May, which stated that adjusted operating profit would be in line with 2008-2009 at £11bn - £11.8bn.
The results were welcomed by the market, sending the shares up 0.47% to 117.45p. However, this should be seen in the context of a near 30 point fall since the start of the year as markets have worried about the effects of regulation on pricing. Vodafone remains a potential bidder for T-Mobile, which would give it a near-40% share of UK mobile revenues and may ease pressure on prices.