Vodafone's third-quarter revenue falls

6th Feb 2014 07:48

- Revenue falls by 3.6 per cent- Tough European conditions and competitive pressures- 4G expected to boost resultsVodafone's third-quarter revenue dropped 3.6 per cent to 11bn pounds, reflecting challenging trading conditions in Europe and competitive pressures.Organic service revenue in the UK fell 5.1% and declined 7.9% in Germany. Spain and Italy experienced a 14.4% and 16.6%, respectively. The falls was due in part to strong price competition.Emerging markets, on the other hand, generated strong organic growth supported by rapidly increasing mobile internet users and data usage. India, Turkey, Egypt and South Africa were among the markets that achieved an increase in revenue.The introduction of 4G, now available in 13 countries, has boosted customers by more than 370,000 since its launch in August.Overall, free cash flow of £1bn in the quarter was £0.2bn lower year-on-year due mainly to a rise in capital expenditure.Capital expenditure of £1.8bn was £0.3bn higher than the prior year due to increased investments in growing the business. Net debt including joint ventures was £31.5bn, an increase of £5.8bn in the quarter following the acquisition of 76.6% of Kabel Deutschland for £7bn, including acquired debt. Net debt excluding joint ventures was £29.8bn. Chief Executive, Vittorio Colao, said: "Our emerging market businesses are growing strongly, supported by consistent execution and accelerating demand for data. "In Europe, conditions are still difficult, and we continue to mitigate these challenges through on-going improvements to our operating model and cost efficiency. In addition, the shift to 4G is gaining momentum and we have seen improving mobile customer net addition trends.He said he is optimistic that the revenue performance will begin to improve "as regulatory headwinds ease and customer appetite for video and content services increases".RD