Regulators take bite out of Vodafone’s growth

EU officials have been cutting the fees companies can charge for roaming, affecting profits for all phone operators in Europe

Vodafone’s revenues have been hit by new rules dictating how much it can charge in South Africa and Europe, while tough competition also took its toll at the world’s second-largest mobile phone company.

EU officials have been cutting the fees companies can charge for roaming, affecting profits for all phone operators in Europe.

But Vodafone said it was also struggling in Spain in particular, where organic revenues, which exclude handset sales and currency factors, were down 15.3 per cent in the three months to the end of June compared with a fall of 12.6 per cent in the previous quarter.

The company blamed Spain’s economy and consumers’ fondness for cheaper SIM-only deals and buying mid-range phones.

In South Africa there were similar problems, with revenues flat in the quarter after officials ordered phone operators to halve connection fees to other networks.

India offset Vodafone’s European woes, with revenues up 10.3 per cent.

The UK saw revenues fall 3.2 per cent. However, the company said its consumer mobile business returned to growth in the quarter.

Chief executive Vittorio Colao said: “The year has started in line with our expectations. Through our commercial actions and investment, our performance is beginning to stabilise quarter on quarter in several of our European markets, with customer appetite for 4G services clearly growing.”