Vodafone, the second-largest wireless carrier in Europe, has reported a decline in underlying service revenues, as growing competition and the economic downturn in Europe hit trading.
Hit by weak economy
Revenues for the three months up to June declined by 3.5%, the mobile phone company said. Revenues in Germany, which is its largest European market, dropped 5.1%, and they dropped 4.5% in the U.K. The weakness of the economy in Europe offsets better news from emerging markets, with India revenues higher 13.8%.
Vodafone said that conditions in Europe “remain challenging due to ongoing economic and regulatory pressures and increased competitive intensity within some markets.”
Southern Europe’s service revenues declined by 14.4%, with a 17.6% drop in Italy, and fell by 10.6% in Spain.
In line with expectations
Despite the decline, the 3.4% drop in overall revenues was in line with forecasts, and Vodafone admitted its outlook for the full financial year.
“Although regulation, competitive pressures and weak economies, particularly in Southern Europe, continue to restrict revenue growth, we continue to lay strong foundations for the longer term,” said chief executive Vittorio Colao.
The previous month, Vodafone has decided to purchase German cable operator Kabel Deutschland for $10 billion.
The acquisition has been seen as a change in strategy for Vodafone, as it marks its first venture into consumer broadband and television.