Vodafone Group Q1/2012 Revenues Hit $17 Bln, Awaits Verizon Dividend

Operator group Vodafone (VOD) reported almost flat revenues for the quarter ended June 30, climbing by just 1%, to reach £10.8 billion ($17 billion). Group service revenue grew by just 0.6% although group data revenue saw a significant increase of 17.1%, which the firm attributed to an increase of smart phone penetration to 28.7%.

“Despite the difficult market conditions, particularly in southern Europe, we continue to make progress in the key areas of data, enterprise and emerging markets, while maintaining tight control of our cost base” said CEO Vittorio Colao.

“We remain focused on driving through significant improvements to our customers’ experience through our ongoing investment in our networks, stores and IT platforms.”

Emeka Obiodu, senior telco strategy analyst at Ovum, said that the significant point from this result is that emerging markets are no longer sufficiently rescuing poor performances from Vodafone’s European markets. He explained that Vodafone is not alone in noting the impact of competition, further regulator-mandated price cuts and the poor economy for Europe’s telcos.

“Unfortunately, these dynamics are not going to change soon and the industry will have to work a lot harder to stabilize its performance while unlocking additional value in their business,” he said.

“Ironically, the main shining star in the results is Verizon Wireless. Had Vodafone’s management capitulated to shareholder pressure few years ago to sell the stake, the Vodafone group’s results would have even being more worrying.”

As another bonus, Vodafone is waiting to hear whether it will get a $4.5 billion dividend from Verizon, which would give credence to the operator’s decision to hold onto its stake in the US carrier