Credit: Ben Sutherland/Flickr

Vodafone is growing again - but not in Europe

The telco giant is booming in Asia but struggling to compete in Europe.

by Jack Torrance
Last Updated: 05 Jun 2015

It looks like Vodafone’s heavy investment in 4G may be beginning to bear fruit. After almost three years of declining organic revenues, today the telco announced its quarterly sales in the three months to 31 March were up – even if it was just by 0.1%.

Vodafone has put a lot of faith in the importance of 4G, ploughing billions into its ‘Project Spring’ initiative, which is rolling out the faster network across Europe. It says it now has 20.2 million 4G customers, each of which uses around twice as much data as a 3G customer (while most of its customers in London still struggle to get 3G - Ed.).

‘Our Project Spring investment programme is on plan, delivering a significantly improved experience to customers,’ said chief executive Vittorio Colao. ‘In Europe, 4G coverage now extends to over 70% of our footprint, and voice quality and reliability have improved noticeably.’

He admitted there was still work to do though, as just 13% of its European mobile customers are on 4G. In fact, overall organic service revenues in Europe are still on the slide – down 4.7% in the year, compared to 5.8% growth in emerging markets. That's perhaps why its share price slid around 2.7% this morning to 227.8p.

Vodafone said its European woes were mainly caused by the ‘macroeconomic environment’, competition and regulation. While its organic growth may have faltered, it’s been hungrily acquiring European competitors including Germany’s Kabel Deutschland and Spain’s ONO.

It’s also been beefing up its offering in Britain, with plans to launch TV and broadband later this year in a bid to compete with rivals Sky and BT, who will soon be able to sell so-called quad-play (TV, broadband, phone, mobile) packages to bargain-hungry customers. Both are hungry and fierce competitors and Vodafone will have a tough time securing a bigger share of its more mature markets, even if its big 4G plans prove to be popular.


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