Vodafone focuses on FMC success, as net profit slides nearly 70%

Vodafone flaunted its converged service provider credentials, stating it is now one of Europe's largest fixed broadband providers as it revealed earnings in the six months to end-September were stabilised by an improved performance in its domestic region.

Vodafone CEO Vittorio Colao

Vodafone CEO, Vittorio Colao

The UK-headquartered operator said its transition from mobile-only to unified communications service provider is well underway, with fixed broadband users in Europe hitting 10.5 million by end-September--the same number as are signed up to the operator's 4G/LTE services globally. Vodafone said fixed broadband revenues accounted for 18.7 per cent of total service revenues of £19.1 billion (€24.2 billion/$30.2 billion) in the six-month period.

CEO Vittorio Colao said the operator will launch fixed broadband services in the UK in the first half of 2015, using a mix of its own fibre broadband network and wholesale lines supplied by BT, the Independent reported.

Vodafone's shares increased 5.5 per cent as investors were buoyed by an 8.9 per cent year-on-year rise in total revenues to £20.7 billion in the six months to end-June, the newspaper added.

The operator also increased earnings before tax, depreciation and amortisation (EBITDA) 5.5 per cent year-on-year to £5.8 billion. However, net profit slipped 69.5 per cent to £5.5 billion.

Colao said the company saw "growing evidence of stabilisation in a number of our European markets" in the six months to end-September. Vodafone's LTE networks are encouraging subscribers to "trade up to bigger data allowances," he noted, and the operator's "unified communications strategy continues to advance, with accelerating customer growth."

Despite the positives, Colao conceded that competition in Vodafone's markets remains high "and regulatory and macroeconomic risks remain." The CEO noted that just 6 per cent of Vodafone's global subscriber base use its LTE networks, but said the company is pressing on with deployments that will see LTE coverage in Europe hit 90 per cent in the next 18 months.

"[W]e are not yet half way through our [Project Spring] investment programme, and there is still much more we will do to build a differentiated service for customers and improve perception," Colao said.

For more:
- see Vodafone's earnings announcement [PDF]
- view this Independent article

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