Country-specific and regional revenue performance of Vodafone in Q1

Telecom Lead Europe: Vodafone’s poor performance in all
regions contributed to 7.7 percent decline in revenue in the first quarter of
2012. is presenting country-specific and
regional financial performance of Vodafone.

Sales dipped to 10.76 billion pounds in June-ended
quarter of 2012.

Capex declined 7.5 percent to 1.1 billion pounds.

Vodafone said its Group service revenue increased 0.6

The mobile major continued strong service revenue growth
in emerging markets: Vodacom 5.7 percent, India 16.2 percent and Turkey 18.7

It experienced mixed trends in Europe: service revenue
growth strong in Germany at 4.2 percent; In UK, Vodafone reported -0.8 percent
growth due to increased competition and a weaker economy; conditions in Italy
(-7.7 percent) and Spain (-10.0 percent) are challenging.

Despite the difficult market conditions, particularly in
southern Europe, we continue to make progress in the key areas of data,
enterprise and emerging markets, while maintaining tight control of our cost
base. We remain focused on driving through significant improvements to our
customers’ experience through our ongoing investment in our networks, stores
and IT platforms,” said Vittorio Colao, chief executive, Vodafone.


Vodafone’s revenue decreased 8.2 percent. Service revenue
declined 1.6 percent primarily due to the impact of MTR cuts, competitive
pricing pressures and continued macroeconomic weakness, partially offset by
growth in data revenue.

Service revenue growth decreased compared to the prior
quarter due partly to the benefit of the additional leap year day in the
previous quarter. Growth in Germany and Turkey was offset by declines in most
other markets, in particular, Italy, Spain, Greece and Portugal.


Service revenue increased by 4.2 percent with growth in
data, enterprise and wholesale revenue more than offsetting the competitive pressures
in the market, particularly in consumer prepaid.

Data revenue grew by 19.6 percent driven by higher
smartphone penetration and an increase in smartphones sold with a data bundle.
Significant customer wins and positive ARPU development contributed to
enterprise revenue growth of 7.8 percent. Wholesale revenue grew significantly
driven by customer acquisitions supported by the launch of services by a new
partner during the quarter. In reaction to continued competitive pressure in
consumer prepaid, new tariffs were introduced in April 2012.

The roll out of LTE has continued and we now have 193,000
customers using the service in both rural and urban areas. Approximately 2,900
base stations had been upgraded to LTE at 30 June 2012, providing around 35 percent
household coverage.


Service revenue declined 7.7 percent as a result of
intense competition and customers reducing or optimizing their spend on tariffs
due to the weak macroeconomic environment. Data revenue grew by 11.4 percent
resulting from higher smartphone penetration and integrated tariffs which were
refreshed in June 2012. Enterprise revenue declined due to the impact of the
macroeconomic environment, although Vodafone One Net continues to perform well.
Fixed line revenue growth was impacted by intense competition.


Service revenue declined 10 percent impacted by intense
competition, continued macroeconomic weakness and high unemployment, which have
dented consumer confidence and driven customers to reduce or optimize their
spend on tariffs. Data revenue grew strongly by 24.9 percent, benefiting from
increased smartphone penetration and integrated tariffs. Fixed line revenue
grew by 10.0 percent primarily due to customer base growth. During the quarter
Vodafone reduced handset subsidies for new customers aimed at both reducing
costs and increasing our focus on customer retention.


Service revenue decreased 0.8 percent driven by
macroeconomic weakness and competitive pressures partially offset by an
increase in data and the success of integrated tariffs. Macroeconomic pressures
continue to impact consumer confidence adversely and in turn reduce
out-of-bundle usage. In addition there has been significant competitive
pressure during the quarter resulting from competitors introducing a number of
new unlimited tariffs. Data revenue grew by 4.0 percent due to high smartphone
penetration and growth in smartphones sold with a data bundle. Consumer
contract churn improved as a result of our churn management program.

Other Europe

Service revenue increased by 1.6 percent as growth in
Albania, Malta and Turkey more than offset declines in the rest of the region,
particularly in Greece and Portugal which continued to be impacted by the
challenging macroeconomic environment and competitive factors. Service revenue
in Turkey increased by 18.7 percent resulting from strong growth in data
revenue driven by mobile internet and higher smartphone penetration, an
increase in enterprise revenue, as well as benefiting from the success of
commercial initiatives. In the Netherlands, service revenue declined by 1.5
percent due to the impact of a network outage in April 2012 following a fire in
Rotterdam, which reduced service revenue growth by an estimated 3 percentage
points. Excluding this impact, service revenue grew year-on-year led by the
continued growth of our customer base and strong roaming performance, partially
offset by MTR cuts, price competition and customers optimizing tariffs.

Africa, Middle East and Asia Pacific

Revenue declined 3.8 percent including a 10.0 percentage
point adverse impact from foreign exchange rate movements, particularly the
Indian rupee and the South African rand. On an organic basis service revenue
grew by 6.1 percent driven by customer and data revenue growth, partially offset
by the impact of MTR reductions and competitive pressures. Service revenue
growth decreased compared to the prior quarter partly due to the benefit of the
additional leap year day in the previous quarter. Growth was led by strong
performances in India, Vodacom, Egypt, Ghana and Qatar, offset by service
revenue declines in Australia and New Zealand.


Service revenue grew by 16.2 percent driven by an 8.6
percent increase in the closing customer base, strong growth in incoming and
outgoing mobile voice minutes and 1.6 percent growth in the effective outgoing
rate per minute. Growth this quarter was 4.9 percentage points lower than Q4
FY12, which had benefited from higher year-on-year customer growth. Q1 saw the
introduction of regulatory changes which impacted on the way integrated tariffs
can be offered to customers. There was also a lower rate of growth at Indus
Towers following a slow down in tenancies from new entrants and a change in the
pricing structure for some existing customers. Data revenue grew by 12.4
percent driven by the increase in data customers and higher penetration of data
enabled handsets, as well as successful promotions. At 30 June 2012 active data
customers totaled approximately 31 million including around 1.7 million 3G data


Service revenue grew 5.7 percent driven by growth in
operations outside South Africa. In South Africa, service revenue increased by
1.8 percent primarily due to net prepaid customer additions and growth in data revenue.
Data revenue in South Africa grew by 10.1 percent, with higher smartphone
penetration and data bundles offsetting significant pricing pressure.

Vodacom’s mobile operations outside South Africa
delivered strong service revenue growth of 39.3 percent2, driven by customer
net additions and more competitive price plans. M-Pesa continues to perform
well in Tanzania with approximately 3.6 million active users.

Other Africa, Middle East and Asia Pacific

Organic service revenue decreased 3.4 percent with both
New Zealand and Australia being impacted by MTR cuts effective from 6 May 2011
and 1 January 2012, respectively. In Australia service revenue declined 15.2
percent as a result of the competitive market, MTR cuts and the continued
weakness in brand perception despite improved network performance. In Egypt
service revenue increased by 4.7 percent, despite the challenging macroeconomic
and political environment, mainly driven by strong data revenue growth. In
Qatar the introduction of promotional campaigns, a revised data pricing
strategy and growth in the customer base delivered service revenue growth of
20.3 percent, despite a competitive pricing environment. Service revenue in
Ghana grew by 24.5 percent due to sustained strong growth in the customer base.

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