Vodafone signals improved trend

Growing demand for 4G services and the early benefits of its £19bn Project Spring investment plan meant revenues were down 1.5 per cent in the three months to September 30, against a 4.2 per cent fall in the previous quarter.

Vodafone shares opened higher today as chief executive Vittorio Colao pointed to underlying earnings of between £11.6bn and £11.9bn in the year to March 31. The bottom end of the range was previously £11.4bn, although the figure is a long way short of last year’s £12.8bn.

Mr Colao said: “We have made encouraging progress during the quarter. There is growing evidence of stabilisation in a number of our European markets, supported by improvements in our commercial execution and very strong demand for data.”

Service revenues in the UK were down by 3.1 per cent in the half year to September 30 after it added 96,000 customers in the second quarter, taking its total base to 19.66 million - of which 40 per cent were pre-paid customers.

Conditions have been much tougher in Spain and Italy, where Vodafone’s service revenues were down by 12.4 per cent and 13 per cent respectively.

By contrast the Indian market is booming for Vodafone after revenues rose 11.7 per cent, driven by continued customer growth and strong data usage.

Vodafone’s Project Spring plan aims to accelerate improvements to its network, resulting in wider 4G coverage in Europe and 3G coverage in emerging markets.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: “Whilst the challenges persist, Vodafone has posted a relatively comforting set of numbers, including an upward revision to its full year earnings.”