Vodafone UK grows sharply as Europe struggles

Vodafone UK has grown despite declining mobile customer numbers due to a steep price increase.

In April, the mobile and broadband provider raised fees for contract clients by 14.4pc. This led to a core revenue increase of 5.7pc at its domestic arm in the first three months of its financial year.

The sales increase was achieved despite the loss by 66,000 of mobile customers. This was offset by the addition of 42, 000 broadband lines.

Its performance in the home market, where Vodafone has pursued a merger between Three, claiming it can’t make enough profits, was different from its other European major markets.

Vodafone’s business continued to shrink in Germany, Italy, and Spain where the price increases were not as dramatic.

Vodafone, which is the largest market in Germany, blamed its decline on the loss of customers it has suffered over the past 18 months, whether they were mobile, broadband or TV. In Spain, it lost customers in all areas.

Vodafone’s service revenue grew by 3.7pc in the three-month period ending June, including Vodacom and its rapidly growing African business.

Investors welcomed the improvement in sales growth, which led to a rise of almost 5pc for Vodafone shares. However, the company is still close to its lowest point since before dotcom boom.

Margherita Della Vale, CEO of Vodafone, has praised a better performance in almost all European markets. She added, “Of Course, we have more work to do.”

This is the first set since Vodafone announced last month that it would merge with Three, a smaller competitor in a deal which would create Britain’s biggest mobile network.

Both companies insist that the tie-up will not result in higher prices for customers. competition regulators are likely to scrutinize the deal, however, as the number players on the market will be reduced from four down to three.

National Security Concerns could also draw attention to Three’s links with the Chinese government through Hong Kong-based CK Hutchison. Vodafone will own a 51pc share in the joint-venture, while CK Hutchison holds 49pc.

Ahmed Essam said that Vodafone UK’s boss Ahmed Essam believed the company had a strong case in any review of national security.

The and Three merger is part of an effort to revive growth following a turbulent period in which the share price has fallen by 60pc during the past three years.

In an attempt to reduce costs, Vodafone announced earlier this year that it would cut 11,000 jobs in the next three-year period. It is also evaluating options for its Spanish business, including the possibility of a sale.

Luka Mucic, Vodafone’s new Chief Financial Officer, was also announced on Monday.

M. Mucic, who was previously the finance director of the German software giant SAP will join the company beginning September. He will receive a salary of £760,000 with a bonus up to £1.5m.

Vodafone confirmed its guidance of a full-year profit of €13,3bn with a free cash flow adjusted of €3,3bn.

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