Vodafone Q3 sales rise as pound drops; India revenue goes up

Vodafone Q3 sales rise as pound drops; India revenue goes up
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First Published: Tue, Feb 03 2009. 09 41 PM IST
Updated: Tue, Feb 03 2009. 09 41 PM IST
London: The world’s largest mobile phone company, Vodafone Group Plc., said third quarter sales rose 14% as the pound slid and revenue climbed in India.
Vodafone had the biggest gain in more than eight weeks in London trading after raising its sales and profit forecast to reflect the currency’s decline.
Sales in the three months ended 31 December rose to £10.47 billion (Rs72,452 crore) from £9.16 billion a year earlier, the Newbury, England-based company said in a statement on Tuesday.
The pound slumped 23% against the euro in 2008, increasing the value of Vodafone’s euro-denominated sales when converted into the UK currency.
Service revenue in India jumped 30%, but it was still slower from the previous quarter amid growing competition.
Excluding currency swings and acquisitions, revenue fell 1% as growth in Asia and Africa failed to make up for a decline in Europe, where the company generates about two-thirds of its sales.
Vodafone made progress on its plan to reduce costs by £1 billion by March 2011, chief executive officer Vittorio Colao said. The measures will have “some impact on headcount”, he told reporters on a conference call on Tuesday. He declined to say how many jobs may be affected.
“Our underlying performance showed similar trends to the previous quarter,” Colao said in the statement. “In the context of the current economic environment, we have continued to implement our strategy, with an emphasis on customer value, mobile data, enterprise and fixed broadband.”
Vodafone has expanded in emerging markets in the past two years with acquisitions in India, Turkey and Ghana to make up for slower growth in Europe. The company added 9.5 million new customers in the third quarter for a total of 289 million on 31 December.
The company bought a 52% stake in Hutchison Essar Ltd, now India’s third largest wireless provider, for $10.7 billion (Rs52,216 today) in May 2007, and purchased Turkey’s Telsim Mobil Telekomunikasyon Hizmetleri AS for $4.55 billion in 2006. On 28 May, Vodafone and a local partner said they will pay $2.1 billion for Qatar’s second wireless licence.
“Vodafone’s strategy to expand in fast growing markets really makes sense,” Christopher Nicholson, an analyst at Oraca Ltd Independent Equity Research in London, said.
Vodafone’s shares gained as much as 7.22% to 137.3 pence, the biggest intra-day gain since 8 December. The stock traded at 137.2 pence as of 1pm in London. Sales surpassed the average analyst estimate of £10.29 billion compiled by Bloomberg via phone and email.
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First Published: Tue, Feb 03 2009. 09 41 PM IST