Vodafone Group Plc reported on Thursday an improvement in revenue drops during the third quarter as the British company benefited from increased traffic on its 4G networks.
The worlds second-biggest mobile carrier by subscribers stated a group service revenue, excluding mergers and acquisitions, of £9.79 billion for the three months ended December 31, down 0.4% compared to last year, its smallest decline in 10 quarters.
The figure compares with a decline of 4.8% reported in the third quarter of 2013. Excluding the impact of mobile termination rate cuts, service revenue scored a 0.2% increase.
Group revenue jumped 13.5% to £10.88 billion, slightly above projections of £10.40 billion for the quarter.
The company also said it had returned to growth in its domestic market, with a 0.9% increase in service revenue to £1.53 billion. Vodafona signed 76 000 new consumer contracts in the UK, supported by successful sales campaigns. Business contracts also increased, the company said.
However, the Vodafone is under pressure in its home market after rivals EE and O2 were purchased by telecoms giant BT and investment company Hutchison Whampoa, respectively.
Previously, Vodafone has said it will introduce its own broadband and TV services in the UK later this year, outlining a trend of closing the gap between services offered by mobile operators and telecoms.
In Europe the company reported a 2.7% decline in service revenue to £6.26 billion, an improvement compared to the drop during the previous three months and the 9.6% fall in the third quarter of 2013. Vodafone said it continued to benefit from increase consumer interest and “stable pricing environment” during the quarter. However, only the UK reported a positive change in service revenue, with Italy and Spain stating heavy drops.
Meanwhile, Vodafone reported a 5.9% increase in service revenue from its operations in Africa, Middle East and Asia Pacific, boosted by strong results from India.
Vodafone added 10.1 million 4G customers in Europe to bring the total number to 13.7 million spread across 18 markets.
Vodafone restated its full-year, ending March, guidance of earnings before interest, taxes, depreciation and amortization to land between £11.6 billion and £11.9 billion.
“We have achieved another quarter of improving revenue trends in most of our major markets,” said Chief Executive Vittorio Colao.
Vodafone lost 0.17% on Wednesday and closed at GBX 236.50 in London. On Thursday the stock fell 0.53% to GBX 235.25 at 10:39 GMT, marking a one-year increase of 6.40%. The company is valued at £62.80 billion.
According to the Financial Times, the 24 analysts offering 12-month price targets for Vodafone have a median target of £242.25, with a high estimate of £285.00 and a low estimate of £130.00. The median estimate represents a 2.43% increase from the last closing price.
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