It’s a Mixed Treat for Vodafone!
Tuesday saw Vodafone Group Plc, the second-largest mobile-phone company, report a quarterly rise for the first time in almost three years, 0.1 percent in the three months ended March. However, it continued to stay weak in Germany, which is its biggest market.
Vodafone, with over 440 million mobile customers in countries ranging from Albania to Ireland, Qatar, India, South Africa and New Zealand, witnessed mild improvements in Italy, Spain and Portugal while it remained weak in its biggest market, Germany. The reasons attributable to this fall in revenue are decreased consumer spending and regulator-imposed price cuts.
The shares of the Newbury, England-based company plunged by almost 3 percent in London, to end at 227.85 pence. Here, the wireless carrier faced competition from EE Ltd. and O2. BT Group Plc and EE have plans for a merger, to become the biggest provider of packages of TV, broadband, mobile and home-phone services. The company has already submitted their plan to UK's competition authorities for approval, this Monday. The reply is awaited.
In a bid to outscore growing competition at home, Vodafone is contemplating a potential tie-up with billionaire John Malone's, Liberty Global Plc, which would give Vodafone increased access in Europe and UK. Vodafone is also planning to start selling its own consumer broadband, TV and home-phone service in the UK.
Next, the company's biggest market by sales, Germany, saw a 3.1 percent fall in service revenues, that is, the money Vodafone received from customers' plans and traffic on its network. To make up for the loss, the carrier is introducing changes to its marketing strategy and focusing on improving its network to win back customers, it had lost to Deutsche Telekom AG in the last quarter.
Even the company's African unit reported a fall in earnings, on account of intensifying competition in South Africa, Tanzania and the Democratic Republic of Congo.