European businesses continue to blight Vodafone, resulting in a drop in sales in the second quarter despite gains in overseas territories.
The cellco’s revenue dropped 3.5% year-on-year in the three months to end June – Vodafone’s fiscal 1Q – as lower sales in European markets offset growth from Vodafone’s operations in Africa, Middle East and Asia Pacific.
Chief executive, Vittorio Colao, says the firm is laying “strong foundations for the longer term,” referring to a recent deal to acquire Kabel Deutschland, and ongoing 4G deployments. The technology is now live in ten markets, Colao said, and the firm has “made a good start to the year in our areas of strategic focus.”
Peter Boyland, analyst with IHS Electronics & Media, says the firm is being pushed into looking at new options to stem the flow of revenues in Europe.
“Vodafone is heavily exposed to Europe, which makes up some 69% of its revenues, and the operator has been struggling with increases in competition and regulation in the region,” he says, adding. “The group is now being forced to look beyond its traditional mobile only offering in order to tap into the European multiplay market.”