Eurozone woes take shine off Vodafone

Mobile phone giant Vodafone said yesterday that austerity in southern Europe caused it to miss revenue targets in the final quarter of last year.

Declines in Italy and Spain, where sales fell by 4.9 per cent and 8.8 per cent respectively, took the shine off a better performance in emerging markets as well as in Germany and the UK.

The world’s largest mobile phone operator said its service revenue grew 0.9 per cent year-on-year on an organic basis, compared with an analyst forecast of 1.1 per cent.

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Chief executive Vittorio Colao said the group was making progress in the key strategic areas of data, enterprise and emerging markets. “Despite the further deterioration of the southern European economic environment during the quarter, our broad geographic mix is delivering a resilient overall performance,” he said.

The firm maintained its forecasts for the full year. Analysts broadly backed the company, with some pointing out that its update should be more of a worry to holders of European telecoms shares.

Jonathan Jackson, head of equities at Killik & Co, said: Vodafone had an oligopolistic position in a broad range of mature and developing economies. “We believe the group is well placed to benefit from the increased growth in internet access via mobile networks,” he said.