Vodafone Group’s Q1FY15 reports shows an increase in service revenue by 6.9% (Q4: 11.7%), with the growth rate slowing due to the impact of regulation, including an MTR cut. Excluding MTRs, service revenue grew by 10.6% (Q4: 13.2%), with continued customer base growth and an acceleration in the take-up of 3G offsetting continued pressure on voice pricing. These numbers are based on organic growth which presents performance on a comparable basis, both in terms of merger and acquisition activity and movements in foreign exchange rates.
Data revenue grew 65% supported by the addition of 3.1 million new data customers, taking the total to 66.8 million. Smartphone penetration is now 26% across the country and 47% in the four metro circles and Vodafone claims to now have 22 million 3G customers compared to 10 million a year ago. While total voice traffic continues to grow, the outgoing rate per minute has continued to decline, reflecting increased competition. The average minutes of use per customer is lower than a year ago but has increased slightly compared to the previous quarter.
Total mobile customers increased 1.6 million giving a closing customer base of 185.4 million.
Progress on Project Spring remains strong with 1,000 2G sites and 1,100 3G sites added in the quarter (14,000 2G and 21,000 3G since the build commenced), taking Vodafone’s 3G outdoor population coverage in targeted urban areas to 91%. They are now trialling 4G services across selected areas and continue to expand their M-Pesa service with 501,000 active customers supported by 94,000 agents.
Vittorio Colao, Group Chief Executive, Vodafone commented, “We have made a good start to the year. Our emerging markets have maintained their strong momentum and more of our European businesses are returning to growth, as customer demand for 4G and data takes off. Our other key growth areas – unified communications and enterprise – are performing strongly, benefiting from the increased capabilities and footprint that our higher levels of investment are delivering. 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.”