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Vodafone softens Brexit stance

Mobile network operator does not expect the UK leaving the EU to have a significant impact on its ability to carry out business as usual

Despite continuing uncertainty over the form that Brexit will take, mobile network operator (MNO) Vodafone has softened its earlier stance on the future of its UK business in the wake of the 23 June vote to leave the European Union (EU), saying its commitment to its UK customers and investment plans have not been changed by the referendum.

After the Brexit vote, Vodafone had warned that a number of jobs – it employs 13,000 in the UK – might be at risk because it regarded freedom of movement for people, capital and goods as integral to the successful operation of its business, so it was not possible to draw any firm conclusions about the future location of its headquarters.

In its half-yearly results statement, Vodafone appeared to walk back its earlier stance, saying it did not expect Brexit to have a significant impact on its ability to serve customers in their respective markets.

“Our operating companies are standalone, local businesses – incorporated and licensed in the jurisdictions in which they operate – and each is able to adapt to a wide range of local conditions,” it said.

“The referendum does not change our commitment to our UK customers, our investment plans for our UK business or have any immediate material impact or change to any of our principal risks. However, we have set up a cross-functional working group to monitor the implications of the Brexit negotiations for us.”

Vodafone said it had seen a solid start to the year, even though group revenues fell by 3.9% to €27.1bn (£23.5bn) and group earnings dropped by 1.7% to €7.9bn – in both cases mainly because of volatile foreign exchange movements.

The company said growth in data traffic remained robust, mobile contract average revenue per user (ARPU) was stabilising, and claimed it was now the fastest-growing internet service provider (ISP) in Europe, with 675,000 net new broadband customers across a footprint of more than 80 million homes during the six-month period.

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“Our substantial network investments and ‘more-for-more’ propositions have allowed us to capture opportunities from strong data demand, supporting European mobile contract ARPU and continued growth in emerging markets,” said chief executive Vittorio Colao.

“As Europe’s fastest-growing broadband operator, we are driving rapid uptake of our consumer fixed and TV services while our wholly converged enterprise business continues to outperform its peers. We are now translating faster revenue growth into margin expansion, supported by our focus on cost efficiency.”

In the UK, Vodafone’s revenues declined due to a number of factors, including operational challenges following a botched IT system migration that landed it in trouble with regulator Ofcom, and lower out-of-bundle and roaming revenues. It said it now had 8.5 million UK customers on its 4G network.

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