Vodafone results boosted by data; company promises new direction

With what must have been a huge relief, Vodafone's CEO announced that the company had achieved its first quarterly service revenue growth since the recession started 18 months ago. Of note, was the huge leap in data traffic generated by smartphones and 3G dongles--up 25 per cent.

"We have achieved these results through our continuing commercial approach in key European markets, focusing especially on data, and from strong growth in emerging markets, with India now cash-positive at an operating level and our highest ever quarterly revenue in Turkey," said CEO Vittorio Colao.

However, with a touch of mystery, the executive then added that he would announce a change of strategic direction in October, to "drive shareholder value."

While refusing to add more detail--claiming it would be "disrespectful to his board"--this change of direction is understood to include a renewed focus on data services, especially in emerging markets like India and China.

But, this revamp to Vodafone's strategy would also seem to involve a review of handset operating systems. "The world has changed," Colao said. "Many operating systems are strong and competing... this is a good opportunity to have a look at our strategy."

These cryptic comments are sure to have sent analysts into a spin attempting to interpret what the ramifications could be for vendors.

Ovum analyst Emeka Obiodu, perhaps wisely, declined to speculate on the possibilities, and instead focused on what had been achieved: "India, Vodacom and, remarkably, Turkey did well, but the challenge for Vodafone is in Europe. Both Germany and the UK have returned to organic growth. Performance in Spain is understandable given the depth of the economic problems in the country.

"It is worth noting that the growth in Europe has been driven by increased uptake of smartphone and mobile connectivity packages. This is certainly good news," Obiodu added. "But there is no indication that Vodafone has had success with its mobile content solutions such as Vodafone 360."

For more on this story:
- read The Guardian, Rethink Wireless & Ovum

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