Vodafone reports sales recovery as cable business in Germany grows

The mobile phone operator said first quarter European service revenue continued to recover as prices stabilised and commercial performance improved.

Vodafone Ireland saw growth in the consumer contract and enterprise mobile businesses and in fixed line subscriptions but said this was offset by a decline in prepaid mobile.

The world’s second-largest mobile operator’s group revenue was just over £10bn for the three months to the end of June, down almost 1% on past year.

Group revenue for the quarter edged down 0.9 percent to £10.11bn from last year on a reported basis, but was up 3.3 percent on an organic basis.

Vodafone said organic sales in Germany, where Vodafone is battling against the incumbent Deutsche Telekom, were down 1.2 per cent, compared with the 3.5 per cent fall in the fourth quarter, but that was helped by the inclusion of its Kabel Deutschland TV business.

Vodafone said there was positive momentum in Africa, Middle East and Asia Pacific, with South Africa back to growth, revenue in India up 6.9% against the same quarter last year, Vodacom up 4.5% and Turkey rising 15%.

Its first quarter revenue excluding handset sales, currency movements and mergers or acquisitions-a key metric-rose 0.8%.

The stock has gained 6.1 per cent so far this year and the company now has a market capitalisation of £62.7 billion. The company also confirmed its outlook for the financial year 2016.

Vodafone now has 12.3m fixed broadband customers in the UK.

Shares in Vodafone were up 2.4pc this morning following the trading update.

“However, our markets are, as always, highly competitive and we therefore have to remain very focused on efficiency, cost control, and excellent value and service to customers, while continuing to deliver a good return for shareholders”, said group chief executive Vittorio Colao.