[glasgow herald] Vodafone has reported growth in service revenues for the first time in two years, helped by strong demand for mobile phone data.
The world’s largest mobile phone network operator reported a 1.1% rise in service revenues to £10.58 billion in the past three months, reversing a trend that began in the final quarter of 2008. Revenue from data services such as smartphones and high-speed internet “dongles” jumped by 25%.
“These are the first quarterly results to show service revenue growth since the global recession impacted,” said chief executive Vittorio Colao. “We have achieved these results through our continuing commercial approach in key European markets, focusing especially on data, and from strong growth in emerging markets, with India now cash-positive at an operating level and our highest ever quarterly revenue in Turkey,” he added.
Vodafone saw strong growth in demand for smartphones in Europe during the quarter, particularly in the UK where the company started selling Apple’s iPhone earlier this year.
Since taking over as chief executive in summer 2008, Colao has been trying to increase growth in Vodafone’s existing markets rather than continuing with the acquisition drive that has given it a global presence.
Vodafone said there was still room for further economic improvements in many of its markets but said the changes it had made so far – to focus on the sales of data plans for internet access and emerging markets – had worked well.
Later this year, the Newbury-based company will set out plans to accelerate its strategy to drive further shareholder value.
The group released the trading statement before its annual meeting, which is expected to be stormy. The board is fighting off increasing complaints from investors that the company’s market capitalisation does not match analysts’ valuations.
The Ontario Teachers’ Pension Plan, a Canadian fund with a 0.42% stake in Vodafone, wants a board shake-up because of concerns about the mobile operator’s “strategic weaknesses” and “disastrous” acquisition record.
Vodafone has previously faced calls to resolve situations where it owns minority stakes in assets, such as in the US where it owns a 45% in Verizon Wireless, and in France where it owns a 44% stake in SFR. Its 3% holding in China Mobile could be another disposal option.
On the trading update, Robin Bienenstock, analyst at brokers Sanford Bernstein, said she expected a portfolio review and clearer commitment to change whether in disposals or structure.
Vodafone reports return to growth as storm brews ahead of AGM