Vodafone's reported revenues were still down 5.5 percent to GBP 10.283 billion due to forex effects, and service revenue declined 6.3 percent to GBP 9.169 billion. In Europe total revenues fell 7.1 percent to GBP 6.038 billion, and AMAP revenues were down 3.6 percent to GBP 2.926 billion on a reported basis.
Vodafone said it benefited from improved performance and more stable pricing in Europe, where the drop in organic service revenue slowed to 0.6 percent from 1.0 percent in the previous quarter. Italy showed the best performance of the big markets, down just 0.3 percent, compared to a 0.4 percent fall in Germany, 0.7 percent drop in the UK and 3.1 percent organic revenue decline in Spain.
Mobile service revenue in Europe was down 2.0 percent on an organic basis, offset by 3.7 percent growth in the fixed market. Vodafone said it saw a reduction in churn and growth in contract customers, while 4G customers rose by 3.8 million in the quarter to a total 28.1 million (23% of total customers), helping data traffic increase 60 percent year-on-year. 4G now accounts for 45 percent of all data traffic on the European network, and average usage per smartphone customer grew by 46 percent year-on-year, to over 1 GB per month. The number of fixed broadband customers was up by 379,000 to 5.9 million at the end of December.
Revenue growth in the AMAP region was held back by forex effects, while underlying service revenues were up 6.5 percent. Vodacom, especially South Africa, contributed 7.2 percent growth, but Indian service revenue growth slowed to 2.3 percent on an organic basis due to increased competitive pressure and regulatory price cuts, Vodafone said. The operator also saw continued strong growth in Turkey and Egypt, with organic service revenue growth of 21.3 and 7.3 percent respectively.
Vodafone said it was 92 percent complete with the mobile build-out of its Project Spring investment programme. This has taken 4G coverage in Europe to 84 percent from 65 percent a year ago and its fixed footprint to 29 million homes passed, while also improving data speeds and dropped call rates. With nearly 35 million 4G customers worldwide, the operator's data traffic was up 68 percent year-on-year in the quarter.
For the full year to March 2016, Vodafone reiterated its outlook for EBITDA of GBP 11.7-12.0 billion and capital expenditure of GBP 8.5-9.0 billion. Free cash flow is expected to be positive after all capex and before the impact of M&A, spectrum purchases and restructuring costs. The company ended calendar 2015 with a total 460.99 million mobile customers, after adding 1.29 million postpaid and 5.50 million prepaid used in the past three months. The fixed customer base reached 12.96 million, an increase of 414,000 in the quarter.
