Feeds

Vodafone cash supply choked as Europe tightens pursestrings

Bad, but could be worse

Eight steps to building an HP BladeSystem

Vodafone Group's UK revenue dropped more than five per cent in its third quarter ended 31 December 2012, demonstrating that Northern Europe just isn't the counterweight to southern losses it used to be.

The UK was particularly bad, thanks to intense competition from Telefonica (O2) and EE's 4G monopoly - which stole profitable customers away. Critically, out-of-bundle use was down as customers cut down on calls in an effort to shave costs. This, combined with a legislated cut in Mobile Termination Rates, made the UK a poor performer in Vodafone's last quarter.

Overall, the group saw revenue down by a little more than two per cent, compared to the same period in 2011, though still hitting £11.4bn in the last three months of 2012. Interim statements don't give figures for profit, but the company reckons it is on track to make more than £11bn (but less than 12) in profit over the course of 2013.

That's despite revenue being down across most of Europe, but income from Germany is only down a smidgen and growth in Turkey turns the revenue figure across Northern & Central Europe into an upward trend, if only a little.

Southern Europe is heading firmly downwards, with revenue down more than 10 per cent. That's partly down to the same mandated cut in termination rates, but is also down to fewer customers stepping outside their bundle - this is in turn partly because Vodafone is offering bigger bundles to avoid customers leaving and to lure prepaid customers onto contracts.

More than half the European revenue is now coming from bundles, with 48.3 per cent coming from out-of-bundle spending and assorted other stuff.

Growth in India has also slowed down, with customers disappearing thanks to new regulations requiring them to prove their identify to the operator. Indians now comprise 33.1 million of the Vodafone group's 400 million customers, and are rapidly getting into data as smartphones penetrate the subcontinent.

Almost 10 million of Vodafone's customers are machines these days, so they're easy money as they don't need much support, but conversely, very rarely exceed their data allowance, so aren't very profitable.

This is just an interim statement, not full accounts, and it wasn't as bad as some had predicted, so Vodafone shares rose two per cent almost immediately.

Vodafone says its cost-cutting measures will make for a better future. The UK network-sharing deal with Telefonica, for example, only kicked off in November, so hasn't had a chance to save either company money yet. ®

Boost IT visibility and business value

More from The Register

next story
Brit celebs' homes VANISH from Google's Street View
Tony Blair's digs now a Tone-y Blur
Virgin Media goes titsup AGAIN. The cause? Yet MORE DNS strife
ISP refuses to comment on why outages keep happening
ISPs haul GCHQ into COURT over dragnet interwebs snooping
'Exploitation of network infrastructure is unlawful,' says co-claimant
REVEALED: The sites blocked by Great Firewall of Iraq
Reg obtains list of banned sites in crisis-hit nation
Islamic terror peril hits US giants' phone wallets
'We have made the decision to rebrand' says ISIS Isis
Microsoft's Windows Phone 8.1 world conquest plan: folders!
Upgrade looks highly likely to land in early July
Street View Wi-Fi slurp nightmare: US Supremes snub Google's appeal
Ad giant must now face up to class-action suit over wireless data grab
FTC: T-Mobile USA took '$100s of millions' in bogus txt charges
Network CEO blasts Feds' allegations as baseless
BlackBerry knocks Google's KNOX LOCK PICK for Android
John Chen disses Samsung's security solution
prev story

Whitepapers

How modern custom applications can spur business growth.
In this whitepaper learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
The Power of One eBook: Top reasons to choose HP BladeSystem
Only the Power of One delivers leading infrastructure convergence, availability and scalability with federation, and agility through data center automation.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximizing your infrastructure through virtualization
Virtualization continues to be one of the most effective ways to consolidate, reduce cost, and make data centers more efficient.
Build a Business Case: Developing Custom Apps
In this whitepaper learn how to maximize the value of custom applications by accelerating and simplifying their development.