Vodafone Group Plc (VOD), the world’s largest mobile-phone company, said service revenue growth slowed in the fiscal third-quarter as consumers in Spain and Italy cut spending amid the European sovereign debt crisis.
Service revenue excluding currency swings and acquisitions in the three months through December gained 0.9 percent, after rising 1.3 percent in the prior quarter, the company said today. Analysts had estimated growth of 1.1 percent, according to a Bloomberg survey. Service sales include voice, data, messaging and broadband services. They exclude handsets and accessories.
“Despite the further deterioration of the southern European economic environment during the quarter, our broad geographic mix is delivering a resilient overall performance,” Chief Executive Officer Vittorio Colao said in the statement.
Vodafone, based in Newbury, England, has sought to drive data sales from smartphones including Apple Inc (APPL).’s iPhone and handsets running Google Inc. (GOOG)’s Android software to counter declining European service revenue. In Spain, Vodafone has cut prices in the country, as it contends with the highest unemployment rate in Europe.
Vodafone in November 2010 said service revenue will grow in the range of 1 percent to 4 percent in the next three years.
Colao, a former McKinsey & Co. partner who became Vodafone CEO in 2008, said in November he will start a new push to cut costs to cushion the impact of Europe’s economic slowdown.
This week, Vodafone Group abandoned an attempt to merge its Greek unit with rival Wind Hellas after facing European Union regulatory opposition. A successful merger would have allowed Vodafone to reduce costs and better compete in the country with Hellenic Telecommunications Organization SA, or OTE, which is controlled by Deutsche Telekom AG.
Vodafone in November booked an impairment loss of 450 million pounds ($710 million) for its business in Greece, citing lower cash flow and an increase in discount rates. In the year- earlier period, Vodafone had already lowered the value of its Greek operations by 800 million pounds.
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