Vodafone boosted by strong take up of converged offerings

Vittorio Colao, Vodafone

Strong take up of its converged offering in Spain and  “encouraging take-up” of its recently launched German offering helped boost Vodafone’s operating results for the third fiscal quarter, taking the company’s broadband base to 13 million, including 12 million European broadband and 9.4 million TV customers.

Vodafone added 414,000 broadband customers overall in the quarter to December, and 49% of its European base now takes a high-speed broadband service over fibre or cable. Fibre and cable customers increased by 379,000 to 5.9 million over the three months to December.

In Spain, Vodafone added 79,000 broadband customers in the quarter, with 1.1 million customers now taking its integrated cable, TV and mobile service, Vodafone One. The company’s Spanish TV base now numbers over one million. Vodafone said its integration of cable unit Ono was on track to deliver all of its targeted cost and capex synergies by the end of this financial year.

In Germany, Vodafone grew its broadband base by 105,000, boosted by a return to growth of its DSL base. It reported encouraging take-up of its converged Vodafone Red One offering following its launch last November and said its integration of Kabel Deutschland was proceeding as planned, with 75% of targeted synergies to be realised in this financial year.

Overall, fixed service revenue grew by 3.7% in the quarter, driven by growth in fibre and cable broadband.

On the mobile side, Vodafone said its performance was improving, with a 2% decline in service revenue for the quarter and continued growth in its contract customer base.

Vodafone posted overall revenues of £10.3 billion for the quarter, down 5.5% or 2.6% in organic terms. Europe turned in revenues of £6 billion, down 3.6%, but up 6.5% in organic terms.

“We have taken another step forward in the last three months, with the highlights being a strong performance in South Africa and improving trends in Germany and Italy. With seven million new customers in the quarter, we have maintained our good commercial momentum in mobile and are beginning to accelerate in fixed, as we launch converged services in more markets,” said CEO Vittorio Colao.

“Customers are increasingly recognising the quality of our networks, leading to strong growth in data usage and benefiting from the significant investments in 4G and fibre that we have made over the last two years. We continue to face regulatory and competitive challenges in many markets, but we are confident that the business is well positioned for the growth opportunities ahead.”