African markets, UK and IoT businesses doing well; Germany is sluggish while Italy and Spain contract
Vodafone Group’s Q3 earnings report reveals its overall European revenues fell 2.3% in Q3 to €11.37 billion (£9.7 billion) compared to the same period last year. Its shares fell 2% at the news and have fallen 24.3% over the last year.
Note that Q3 did not have the boost from the sale of its Hungary business but there was good news. Revenues from the UK overall rose 5.2%, although little down from last quarter’s 5.5% due to less income from fixed broadband. The UK accounts for about 15% of Vodafone’s total revenue. The proposed merger between Vodafone in the UK and
In Germany, Vodafone’s biggest market, services revenues only increased by 0.3% after a strong Q2 with a 31% rise in sales. The trading update said, “Service revenue increased by 0.3%* (Q2: 1.1%*) as the contribution from higher broadband ARPU was partly offset by the impact of broadband customer losses and lower regulated rates for terminating mobile calls. The lower growth in Q3 primarily reflects non-recurring revenue received from mobile service providers in Q2 and lower IoT revenue in Q3.”
Italy and Spain continue to drag on the group’s performance, contracting by 1.3 and 1.1%, respectively. Vodafone is selling its assets in Spain to Zegona Communications and won approval for the transaction to proceed from the European Commission last week. It is still in negotiations regarding its Italian opco, having definitively rebuffed overtures from Iliad Group.
Vodafone’s other European and African markets performed well, as did its cloud and IoT businesses, growing by more than 20%, due to attracting more customers and price increases.
Vodafone Group’s CEO, Margherita Della Valle highlighted recent strategic partnerships with Microsoft and Accenture as engines of transformation and growth.