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Vodafone recorded a growth in revenue in its Africa, Middle East & Asia Pacific ('AMAP') operations in the quarter ended 31 December 2016, according to an update provided by the telecommunication company.
Service revenue grew by 10.5% (Q2: 11.2%), with strong growth in Turkey, Egypt and Ghana.
Service revenue in Turkey was up 15.0% (Q2: 15.7%) supported by continued strong growth in consumer contract and Enterprise and an increased contribution from fixed.
Egypt service revenue grew 19.6% (Q2: 15.1%) due to continued growth in the active customer base and improving ARPU, despite a challenging macro-economic environment post the recent currency devaluation.
Service revenue in New Zealand was flat (Q2: 1.3%) with continued strong customer momentum across all contract segments offset by lower wholesale revenues. The Commerce Commission is now expected to rule on the proposed merger with Sky Network Television in New Zealand at the end of February 2017.
Highlights
• Group organic service revenue grew 1.7%; Europe 0.7%, AMAP 3.9%
• European growth continues as ARPU stabilises: Italy 3.0%, Germany 1.8%, Spain 0.8%, and UK -3.2%
• AMAP slowed due to competition in India: Vodacom 4.0%, India -1.9%, Turkey 15.0%
• Ongoing 4G adoption drives data growth: 4G customers up 7.6 million to 64.6 million and data volumes 53%
• Strong fixed momentum led by Italy and Spain: 417,000 total broadband net adds of which 262,000 are on-net
• Enterprise outperformance continues with growth of 3.3% driven by fixed market share gains and AMAP mobile
• Full year guidance confirmed: FCF of at least €4.0 billion, lower end of organic EBITDA growth range of 3-6%
Vittorio Colao, Group Chief Executive, commented: “Our overall performance in Europe and Africa remained strong during the third quarter, reflecting good execution. In Europe, service revenue growth continued, led by Italy, Germany and Spain. Mobile contract ARPU continued to stabilise, reflecting the successful adoption of our ‘more-for-more’ propositions, while we remain Europe’s fastest growing broadband company, illustrating our effective convergence strategy. In the UK we have made good progress in improving customer service but face heightened price competition in Enterprise. In AMAP, our strong organic performance in South Africa and Turkey was partially offset by India, where the sector is affected by free services from the new entrant. We anticipate intense competitive pressure in India in the fourth quarter and are taking a series of commercial actions, including the extension of 4G services to 17 leading circles. As announced earlier this week, we have also entered discussions with the Aditya Birla Group about an all-share merger of Vodafone India and Idea. We are reconfirming our guidance for the year and are confident that we will sustain our commercial momentum.”
