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Brexit-fearing Vodafone: Of course we’ll make money from 4G

Revenues up 10%, data volumes grow thanks to video

Vodafone has announced steady-as-she-goes results for the year to 31 March 2015, with group revenue up 10.1 per cent to £42.2bn, and the first increase in service revenue for ten quarters (albeit only 0.1 per cent) — all pretty much in line with what the company had forecast.

Emerging markets saw a six per cent increase, counterbalancing Europe’s 2.4 per cent fall, with the mobile giant arguing that while some countries – notably Italy and Spain – appear weak, when people get 4G they watch videos like crazy.

The average 3G-using Brit goes through 1.6GB a month, while his (or her) 4G equivalent will gobble 3.7GB.

Brits use more data than anyone else, but the picture of 4G users using twice as much data is the same across Europe, except for Germany where moving from WCDMA to LTE handys (mobile phones) only sees a 50 per cent increase in average data volumes.

On average European customers are moving to bigger data bundles, a trend across the board rather than a few customers using lots of data.

Despite having the smallest number of 4G users - three million - among the operators in the UK, Vodafone claims to be catching up, growing at a quicker pace than its rivals and having the highest revenue growth.

Video leads the consumption with Facebook, YouTube and to a lesser extent Netflix generating the most data traffic. However, mobile networks never list porn sites in their statistics, which is odd given that Pornhub claims the majority of its traffic is to mobile devices.

The company cautioned against an exit from the EU and said that while it wasn’t making any preparations for such an eventuality, should it actually happen there would be significant changes to the business. That doesn’t include relocation of the headquarters, although CEO Vittorio Colao said staying in Europe would be the best thing for Vodafone’s customers and shareholders.

While Vodafone is sanguine about the mergers of EE and BT, and of O2 and Three, Colao has strong views about the seemingly anti-competitive nature of some elements. He has long been of the view that Openreach should be completely separated from BT, and if that is not possible there needs to be open access to the network and better processes for checking availability.

He believes that the Dark Fibre recommendations from Ofcom are a move in the right direction but don’t go far enough. Another anti-competitive aspect of the deals, as he sees it, is that EE and Three have a mobile site infrastructure-sharing agreement.

Vodafone doesn’t see a price war breaking out in the UK, regardless of new super-cheap tariffs from Freedompop, TalkTalk and Tesco Mobile.

Big Red isn’t, however, relying on mobes for the money, and already a quarter of it European revenue comes from fixed lines, with Vodafone being keen to grown its broadband base. Services will launch in the UK this summer, with TV to follow. Watch this space. ®

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