Vodafone Group’s Q2 revenue increased by 9.3% overall thanks to the positive impact of exchange rates (8.6% of the gain) and growth in India, South Africa and Italy, but its organic service revenue declined by 2.1% due to weakness across most of Europe and Central Europe due to economic conditions. The declines were primarily driven by reductions in voice revenue resulting from continued pricing pressure and slower usage growth in the current economic climate, as well as lower visitor and roaming revenue as people traveled less. These declines were partially offset by growth in data, fixed line and wholesale revenue. The organic service revenue growth rate was similar to the previous quarter after taking into account mobile termination rate cuts, seasonality and the impact of a new accounting standard for loyalty programs.
A few other highlights from the quarterly report.
- The total number of mobile customers the Group now reaches has surpassed 315 million (proportionate to the investment held in various operators).
- Organic data revenue growth was 19.4%, slightly lower than the previous quarter due to the impact of lower data roaming and lower enterprise activity.
- In fixed broadband the Group generated over 200,000 additions in Europe and fixed line revenue grew at constant exchange rates by 18.5% in Italy and 15.4% in Spain. Europe’s enterprise revenue declined reflecting the economic pressure on business customers.
- Capital expenditure of GBP1.2 billion was at a similar level to the same quarter last year after adjusting for foreign exchange, reflecting continued investment in Europe to support network quality and data growth and in India to drive revenue through footprint expansion.
- In India, Service revenue grew by 23.0% at constant exchange rates including a 7.0 percentage point benefit from the revenue stream generated by the network sharing joint venture Indus Towers. The average customer base increased by 56.0% reflecting the launch of services in seven new circles in the previous financial year. Usage per customer
slowed as a higher number of customers utilized SIMs from more than one operator, in particular in the new circles.
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