Vodafone's revenue drops as European struggles continue

The operator's revenue from voice dropped faster that data grew during at the end of 2011

Vodafone reported a 2.3 percent drop in revenue for the last three months of 2011, as economic conditions, particularly across southern Europe, continue to be weak.

Revenue for Vodafone's third quarter was £11.6 billion. The company didn't report on its quarterly net profit.

"The results are alright. On an organic basis, revenue grew by 0.9 percent," said Charlotte Patrick, principal analyst in Gartner's Carrier Strategy team.

Vodafone said it delivered revenue growth in data services and in emerging markets. However, the sector remains competitive and the economic environment, especially in southern Europe, was challenging.

For example, year-on-year, service revenue dropped by 5.4 percent in Italy and 9.3 percent in Spain. Service revenue also dropped in Greece, Portugal and Ireland. That drop was partially offset by growing revenue in the UK, Germany, the Netherlands and Turkey, according to Vodafone.

Data revenue grew by 18.1 percent thanks to increasing smartphone penetration. In Europe, smartphone penetration was up from about 16.5 percent to 24.4 percent year-on-year.

For operators, the current challenge is to grow revenue from data services faster than the revenue from voice services drops, while keeping costs in check.

Vodafone's data revenue may have grown by £240 million, but voice revenue dropped by £648 million. Vodafone's results were also helped by more revenue from messaging and fixed services, but that wasn't enough for overall service revenue to grow.

The drop in voice revenue is a big issue, and something that Vodafone can't sustain much longer, according to Patrick. There is also a looming threat on the messaging side from applications, including WhatsApp and BlackBerry Messenger, that allow people to send messages without having to pay for SMS, she said.

Looking forward, Vodafone expects to continue to face challenging market conditions, but remains confident, it said.

Send news tips and comments to mikael_ricknas@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Mikael Ricknäs

IDG News Service
Show Comments

Father’s Day Gift Guide

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Laura Johnston

MSI GS65 Stealth Thin

If you can afford the price tag, it is well worth the money. It out performs any other laptop I have tried for gaming, and the transportable design and incredible display also make it ideal for work.

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?