Vodafone continues to be troubled by economic difficulties in southern Europe as group revenues fell again its latest financial report.
For the quarter ending 31 December 2013, group revenues were down 3.6 percent year-on-year to €13.2 billion, with underlying group service sales down 4.8 percent to €11.9 billion.
In Europe, service revenue fell by 9.6 percent to €7.9 billion, although there was better news across its Africa, Middle East and Asia Pacific (AMAP) businesses, with underlying sales up 5.5 percent.
Italy and Spain were singled out for their “challenging” competitive markets although sales also fell in Germany and the UK. Sales were down 13.3 percent in Italy due in part to an “aggressive” price war, while revenues in Spain fell 11.2 percent.
When stripped of the boost provided by the acquisition of Kabel Deutschland, sales in Germany, its biggest market, fell 7.9 percent due to strong price competition in both its consumer and enterprise markets.
Despite signing up 370,000 customers to 4G LTE in the UK, organic sales fell by 5.1 percent. Reported sales were up by over a quarter thanks to benefits coming through from the 2012 acquisition of Cable and Wireless.
There was better news in other divisions. Vodafone Global Enterprise grew by 4.5 percent while M2M revenue were up by 30 percent.
Vodafone is spending heavily to try and improve its business, with capex up by over a fifth to €2.2 billion. In India, for example, it added more than 2,000 3G sites, with 33,000 sites connected through high capacity backhaul. It upgraded more than 1,000 sites in Germany with high capacity backhaul links and signed a national fibre agreement in Turkey to provide access to an additional 7,300km of fibre.
Last November, the operator announced it is to invest an extra €1.1 billion in network infrastructure over the next two years. The first €602.5m will be spent during its current financial year.
Vodafone Group CEO Vittorio Colao said: "Our emerging market businesses are growing strongly, supported by consistent execution and accelerating demand for data. In Europe, conditions are still difficult, and we continue to mitigate these challenges through on-going improvements to our operating model and cost efficiency.
“In addition, the shift to 4G is gaining momentum and we have seen improving mobile customer net addition trends. We are therefore optimistic that our revenue performance will begin to improve as regulatory headwinds ease and customer appetite for video and content services increases."
Colao said the company is likely to post a full year adjusted profit of around €6 billion. The sale of its US business, including its stake of Verizon Wireless, is expected to be completed on 21 February.