Vodafone increases UK enterprise sales, driven by greater data traffic

Vodafone's latest results reflect increased use of smartphones and data consumption within the workplace. UK enterprise service sales increased by 5.3% in Vodafone's first quarter of 2011, compared with the same period in 2010.

Vodafone said 22% growth in UK data sales in the three months to 30 June 2011 was due to higher smartphone use and increased data traffic.

However, across Europe, the company blamed a 1.3% year-on-year decline in enterprise service sales, which includes messaging, data and fixed line sales, on "macroeconomic challenges" in southern Europe, as well as market and regulatory pressure.

"Revenue from our key focus areas of data, enterprise and emerging markets continues to grow strongly. With our broad geographical mix and improving market positions, we are well placed for the rest of the financial year," said Vodafone chief executive Vittorio Colao.

Vodafone Group sales grew 3.5% to £11.7bn in the second quarter of 2011, compared with the same period in 2010. Global data sales grew 25% to account for 21% of global enterprise service sales, which increased 1.7% globally.

In the UK, general service sales grew by 1.7%. Vodafone blamed mobile termination rates (MTR) cuts for slower growth in the UK, which were enforced in April 2011.

Mobile termination rates (MTRs) are the wholesale charges a mobile operator levies on other phone companies to complete calls. But Ofcom wants to cut the wholesale charges for connecting calls to mobile networks by 84% over the next four years from 4.18p per minute to 0.69p. However mobile operators say wholesale charges should fall only to 1.25p.

"[UK] growth was supported by strong net contract customer additions and the penetration of integrated tariffs into the customer base, which more than offset continued competitive pressures," said Vodafone.

The results show Vodafone lost 139,000 UK mobile customers within three months. UK mobile customers fell to 19 million at the end of June 2011, from 19.1 million at the end of April 2011.

Vodafone is one of Microsoft's business partners developing products for small companies that include Office 365. Through its Vodafone One Net service, businesses can buy Office 365 on a per user/per month basis, combined with broadband and fixed and mobile telephone calls. Office 365 will be available to One Net customers for €5 per user/per month.

Photo: Thinkstock