A strong demand for smart phones in the UK and a large surge in new customers in India and Turkey drove Vodafone to a strong result in the quarter ending December. Service revenues rose to £11.9 billion, a 3 per cent gain, the firms said on Thursday.

With a 31.7 per cent growth in service revenues, Turkey was by far the strongest performer, though the Indian division also turned in a strong performance with 16.7 per cent growth. That growth was driven by an 8.7 million net rise in new customers in the quarter, and an increased usage of voice services as the firm cut prices in the face of steep competition. Around 1.1 per cent of the revenue increase was contributed by telecom tower firm Indus Towers, the joint venture between Vodafone Essar, the Bharti Group and the Idea Group.

The firm said it hoped to launch the 3G network during this quarter, following the auctions last year.

Firm on India tax charges

Vodafone remained firm in its stance on Indian tax liabilities following the Hutchison deal in 2007. “Vodafone International Holdings considers that neither it nor any other members of the Group is liable for such withholding tax or is liable to be made an agent of Hutchison,” said the firm in its quarterly management statement.

Elsewhere, Vodafone delivered a strong performance, with service revenues rising 7 per cent in the UK, which Vodafone attributes to the rising popularity of data services on smart phones. There was also a 4.6 per cent rise in revenues at Vodacom in South Africa, and 6.5 per cent growth in its African, West Asian and Asia-Pacific Operations. Continental Europe proved the weakest spot for the company, with reported revenues falling some 1.9 per cent overall, with steep falls in Spain, Italy and Germany.

The firm said it was on track to meet its guidance for the year, with adjusted operating profit to be towards the upper end of its £11.8-£12.2 billion range. However, it does not include the impact of the launch of the iPhone by its US joint venture, Verizon Wireless.

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