Vodafone Q4 results indicate more European woe

07 February 2013 |


Vodafone has reported disappointing Q4 results, further highlighting the worsening market conditions in Europe.

The company’s service revenues were down by 2.6% for the last three months of 2012, with Spain and Italy experiencing the steepest declines.

The company’s chief executive, Vittorio Colao, said the results “continue to reflect very difficult market conditions in Europe”.

In Italy, Vodafone saw its revenues fall by 18.8% to £1.1 billion, while in Spain revenues fell 16.4% to £887 million. Increased competition in both markets was attributed to the decline.

Total revenues for voice fell 11.9% to £5.5 billion. All regions experienced a growth in data services, with revenues rising 7.1% to £1.7 billion. This was, however, not enough to offset the loss of voice revenues.

The Eurozone crisis continues to have a profound impact on European operators, with consumers continuing to reduce their telecoms spend.

The results indicate the limitations of Vodafone’s strategy of investing heavily in emerging markets to offset the loss in its core European market.

This has not come as a surprise to market watchers: “For Vodafone in particular, Ovum warned in 2009 that its emerging market operations must not be relied on to perpetually offset poor performance at home. This has proved to be a prescient warning,” said Emeka Obiodu, principal analyst at Ovum.

“Growth in its emerging markets operations has slowed and Vodafone is now relying on Verizon Wireless. It is to Vodafone's credit that its management fended off pressure to sell the Verizon stake in the past,” he added.

For a full insight into the impact of the Eurozone crisis on M&A activity in Europe click here.