Vodafone returns to growth in the UK

Mobile network operator Vodafone managed to squeeze some growth out of the UK market in the third quarter of its fiscal 2015

Vodafone saw improving revenue trends in most major markets during the third quarter of its fiscal 2015, with group-wide sales up by 13.5% to £10.89bn and declines in organic services revenues less marked than before.

The firm also noted a return to growth in its domestic UK market, with sales up by 0.9% on both a reported and organic basis, to £1.53bn.

Vodafone said this was down to better fixed-line sales and growth in both mobile consumer and enterprise revenues.

Mobile service revenues were up by 2% in the UK, reversing a decline of 0.3% in the second quarter, with 76,000 new consumers helped along by its 4G roll-out

It now has 2.2 million 4G subscribers, although this is substantially lower than sector leader EE, which has been bought by BT for £12.5bn.

Vodafone's acquisition of a number of Phones4U stores strengthened its direct channel sales presence and its ongoing rebranding exercise has now seen 32% of its targeted 8,000 stores refitted.

In its UK enterprise business, strong growth on data drove an improvement in average revenue per user (ARPU), while local fixed-line sales declined by just 2%, reversing a 10.6% decline in the previous quarter.

In a statement to the markets, Vodafone chief executive Vittorio Colao highlighted accelerated growth in India, driven by data. 

"In Europe, improved commercial execution in both mobile and fixed, combined with strong data demand and a more stable pricing environment, is supporting the steady recovery of our top line,” he said.

Colao added that Vodafone’s Project Spring investment programme was well advanced, with 4G coverage now extending to 64% of its European market area, dropped calls down to 0.64% and 26 million homes passed by its next-generation network.

In the UK, Vodafone’s outdoor population coverage on its 4G network now stands at 57%, and dropped calls are down to 0.86%.

Vodafone has now modernised 61,000 mobile sites, added 86,000 new 2G, 3G and 4G sites, and expanded backhaul capacity into 50,000 sites. Across the group, it is now carrying 84% more data traffic year-on-year, with 4G accounting for 26% of European traffic.

“Our customers are really beginning to notice the difference that this investment delivers,” said Colao. “We are confident that this will translate into further improvements in customer perception, ARPU and churn.”

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