HomeFinance, Earnings and Market ReportsVodafone Q1: nice growth but no merger

    Vodafone Q1: nice growth but no merger


    German revenue in decline but overall execution was in line

    Vodafone Group chief executive Nick Read was bullish at the announcement of the latest quarterly FY23 results, despite a continuing decline in Germany, its largest market. The operator’s report declares that its quarterly UK service revenue rose from €1,341m last quarter increase (Q4 2021) to €1,360m. “We have executed in line with our expectations, delivered another quarter of growth in both Europe and Africa, and seen an acceleration in business growth,” said Read.

    While the firm is not immune to current macroeconomic challenges the near-term focus on operational and portfolio priorities remains unchanged. The bad news was that Vodafone’s revenues in Germany, down in the previous quarter, continued in that vein in the last three months, down a further 0.5%. This is a consequence of Germany’s new Telecommunications Act, according to Vodafone. Overall service revenue growth for the telecoms giant was up by 2.5%, rising to €9.5bn.

    Service revenue in Turkey was up by 35.8%, albeit driven by higher inflation. Meanwhile Vodafone Business service revenue grew by 1.7 per cent, supported by higher roaming and digital services revenue. The total reported revenue was €11.3bn.

    The Vodafone UK specific figures show that its fixed broadband base grew again to total 1,072,000 customer, which is up by 22,000, after it put on 59,000 in Q4 FY22. Vodafone’s its mobile base also increased to total 17.22m, a rise of up by 115,000 which comes on the back of an increase of 51,000 subscribers in the previous quarter.

    Most of Vodafone’s fixed broadband base are now converged subscribers, who take both mobile and fixed broadband from the operator. Customers on  broadband service tend to reflect a mix of hybrid fibre FTTC and full fibre FTTP on both Openreach and CityFibre’s UK networks. 

    The operator’s customer base reported the quarterly addition of 18,000 Pay Monthly customers (down from a rise of 37,000 last quarter) and another rise of 97,000 Prepaid (Pay As You Go) users (up from 14,000). In addition, its quarterly mobile broadband (data) usage across their UK network reached 355,661 TeraBytes, which is up from 325,968 TB last quarter, noted ISP Review.

    Reports in The Sunday Times, suggested that Vodafone stand isolated after being rejected for a merger with Orange Spain, which binding agreement to combine its operations with Másmovil, to form an €18.6 billion (US$19 billion) behemoth to challenge Telefónica.

    “Our near-term focus on our operational and portfolio priorities remains unchanged,” said Nick Read. “We’ve made good progress towards stabilising our commercial performance in Germany, and we continue to actively pursue opportunities with Vantage Towers and to strengthen our market positions in Europe.”