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Vodafone Group Plc, the second-biggest mobile carrier, reported the smallest service revenue decline in 10 quarters as sluggish European markets recovered.
Service revenue, the money the Newbury, England-based company gets from customers' plans and traffic on its network, fell 0.4 per cent in the third quarter through December, Vodafone said in a statement Thursday. That was better than the average prediction of a 0.7 per cent decline, based on analyst estimates compiled by Bloomberg.
Vodafone has been investing in its network and adding TV and Web services for customers across Europe to combat shrinking revenue. CEO Vittorio Colao is about halfway through a £19-billion ($29 billion) network improvement project and has been buying cable and TV providers in his biggest markets. In the UK, Vodafone has said it will start selling high-speed internet access through a wholesale agreement with BT Group Plc, and will also begin a TV service this year.
Vodafone fell 0.8 per cent to 234.65 pence at 8:24 am in London trading, paring the advance to 5.4 per cent this year. The benchmark FTSE 100 index dropped 0.6 per cent.
Liberty deal?
Vodafone is weighing its own options, including a potential tie-up with John Malone's European broadband and TV operator, Liberty Global Plc, people familiar with the plans said in November.
Vodafone's third-quarter revenue rose 0.7 per cent, excluding the effect of deals and currency value changes, to £10.9 billion. That compared with the £10.8-billion average estimate of analysts in a Bloomberg survey.
The company reiterated its forecast for earnings before interest, taxes, depreciation and amortisation of £11.6 billion to £11.9 billion for the full year ending March 30.
European service revenue fell 2.7 per cent in the third quarter, better than the 5 per cent drop Vodafone reported in the previous three months.
That compares with a 5.9 per cent gain in Vodafone's Africa, West Asia and Asia Pacific business.
In the wake of BT's talks with EE, Telefonica SA's O2, the second-biggest UK mobile operator, is in discussions to merge with Hutchison Whampoa's Three to create a bigger wireless company.
Sky Plc, the UK's biggest pay-TV provider, said last week it's teaming up with O2 to resell mobile services to its television customers.
