Recession-battered Europeans still squeezing Vodafone's pips
Don't panic, it expected to stumble on sales AGAIN
Mobile operator Vodafone is still feeling the recession's squeeze in Europe as it posted another drop in revenues for the quarter ending last month.
The British group said its service revenue, including joint ventures, for the quarter was £10.155bn, down 3.5 per cent year on year following a 4.2 per cent slip in the previous three months.
Price pressures and increased competition in stronger markets, such as Germany and the UK, combined with ongoing crappy economic conditions across Southern Europe to hit Vodafone where it hurts. The firm said it was continuing to attempt to cut its costs.
"Against a background of significant revenue pressures in Europe we continue to drive cost efficiencies through a range of initiatives including further network sharing agreements (most recently with Wind in Greece), offshoring of business functions to shared service centres, centralisation of procurement costs, and ongoing reductions in support function costs," Vodafone said.
The results, including a 5.1 per cent drop in service revenue in Germany and a 4.5 per cent fall in the UK, were in line with its expectations, it added.
The company wrote down the value of its businesses in Italy and Spain, which are among the hardest hit by the recession, by £7.7bn in the last financial year and the pressures show no sign of easing. Service revenue was down 10.6 per cent in Spain and 17.6 per cent in Italy.
To try to revive things in Europe, Vodafone has been investing in new businesses and launching new services. The group paid €7.7bn for Germany's largest cable operator Kabel Deutschland so it can offer telly, broadband, fixed line and mobile phone bundles. It has also launched a new tariff in 16 markets called Vodafone Red, which lets users pay a price monthly depending on how much data they use and hands out unlimited calls and texts for free. ®