Maksym Yemelyanov - Fotolia

Vodafone underperforms in UK in third quarter

A strong group performance in Vodafone’s third quarter was undermined by difficulties in the UK

Vodafone has blamed increasing price competition in its enterprise business, and lower revenues from mobile virtual network operators (MVNOs) and roaming customers for a slip in its UK performance during the final three months of 2016.

In a third quarter trading update, the mobile network operator (MNO) revealed that its reported UK revenues declined by 19% year-on-year in the three months to €1.72bn (£1.47bn), while its organic service revenues were down 3.2% to €1.6bn.

This compared with flat growth in Spain, and between 2% to 3% in Vodafone’s other major European markets, Germany and Italy.

Vodafone said it saw some improved commercial momentum as its customer service levels began to improve in the UK, with higher than usual contract customer additions, while its growing broadband service offset some of the other losses – Vodafone now claims to have 183,000 broadband customers in the UK, 129,000 of them consumers.

Group chief executive Vittorio Colao said otherwise, Vodafone’s overall performance in Europe remained strong.

“Mobile contract average revenue per user [Arpu] continued to stabilise, reflecting the successful adoption of our ‘more-for-more’ propositions, while we remain Europe’s fastest-growing broadband company, illustrating our effective convergence strategy,” he said.

Group-wide organic service revenue grew by 1.7% to €12.3bn, although total revenue declined by 3.9%, largely due to negative impacts from foreign exchange rate movements.

Of particular note for Vodafone during the quarter was a very strong performance in Egypt, where service revenues grew 19.6%, and Turkey, where they were up 15%, in both cases thanks to massive growth in new consumer contracts and active customers.

Read more on Mobile networking