Weak pound boosts Vodafone sales and guidance

The slumping British pound has helped Vodafone boost revenue grew 14% in the quarter and to raise its full-year profit guidance.

The global cellco recorded sales of £10.4 billion ($14.97 billion) in the December quarter, yet adjusted for exchange rates revenue declined 1%.

Despite that, the company has raised its full-year profit guidance by £500 million - to between £11.5 billion and £12 billion - for the year.

CEO Vittoria Colao said the performance showed "similar trends to the previous quarter."

Service revenue worldwide grew by just 1.4% and European sales fell 2.8%, with Spain shrinking 5%, but the result was buoyed by emerging market subsidiaries.

Asia Pacific and the Middle East service revenue grew 27.9% and 8.4% organically.

The new Indian subsidiary Vodafone Essar recorded revenues of around £468 million and accounted for 65% of the group's 9.5 million new subscribers. The group now has a customer base of 289 million.

Ovum senior analyst Emeka Obiodu warned that emerging telecom markets are maturing quicker than anybody had expected.

"Whereas Vodafone has long relied on expansion to prop up its revenue growth credentials, gradually slowing revenue growth trends in its emerging market operations means group-wide growth will become much tougher in the future," he said.

Yet considering the current economic climate, Vodafone's results are nothing to sneer at, Obiodu said. "The operator has managed to steady its business, and has avoided the sort of doom that was reported by the mobile handset makers."

 

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