Vodafone's cash mountain rocked by eurozone emergency
Hung up on Italy, Spain, Portugal and Greece
Vodafone is rolling in cash thanks to a healthy year in the US and stability in the UK, Germany and the Netherlands. However the telco is still only drawing 14.5 per cent of its £43bn service revenue from mobile data, despite the fact that it represents the majority of traffic carried.
Total revenue across the group over the past 12 months was up a smidgen to £46.4bn ($73bn) and America's Verizon Wireless (of which Voda owns 45 per cent) provided a good chunk of that growth. India and Turkey also saw significant jumps (19.5 per cent and 25.1 per cent respectively) as those markets aren't yet at saturation point.
Elsewhere the growth was in data, as smartphone penetration continues to increase (26.9 per cent in Europe now), and that's driving customers towards contracts, which is good for Vodafone: contract customers always spend more money. Revenue from data hit £6.2bn, about £1bn more than the cash collected for text messages.
Profit for the year ending 31 March is expected to be somewhere between £11bn and £12bn, depending on how the euro fares in the next few months: although that figure is up 2.5 per cent year-on-year, it's 2.4 per cent lower when including currency changes.
Given the eurozone crisis, the operator felt it necessary to write down £4bn in value on its operations in Italy, Spain, Portugal and Greece where an uncertain future and EU regulation (such as the caps on roaming rates) threaten its coffers.
In the last year revenue from Italy tanked a little, dropping 8 per cent, while customers in Spain spent just under 2 per cent less than last year as their money begins to run out, but additional connections in the developing markets and a decent performance in the US more than offset that. ®
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