Vodafone CEO hints at return to growth for mobile operator as full-year results drop

Vodafone has reported group revenue decrease of 3.0% to £41bn, while service revenue dropped by 3.5% to £37.2bn, in its full year financial report for 2016.

In Europe, the company reported mobile service revenue declined 2.0%, while organic service revenue in Europe fell by 0.6%.

The mobile operator said adjusted operating profit fell by 11.1% to £3.1bn as organic growth was offset by the increase in depreciation and amortisation resulting from Project Spring, its £19bn two-year plan.

In February 2016, the company said its global tax burden had fallen to £5bn. For the full year, the company reported total tax of £3.36bn, giving it an adjusted effective tax rate of 15.1%.

In terms of business growth, the company said the strategy was on course apart from in the UK and Germany.

Through Project Spring, Vodafone stated it has extended European 4G coverage to 87% of its footprint, 3% below its target of 90% due to roll-out delays primarily in the UK and Germany.

According to Vodafone, 91% of data sessions are now greater than 3Mbps, 1% more than its original Project Spring target of 90%. Dropped call rates in Europe are now less than 0.5%, compared with 0.9% previously, as targeted.

The company said it has added 43,000 mobile sites and installed 115,000 modernised “single RAN” base stations, which means it now has 50,000 more 2G-enabled sites, 77,000 more 3G-enabled sites and 76,000 more 4G-enabled sites.

“We have also added 102,000 high capacity backhaul links, well ahead of our targets,” the company said.

“In mobile we aim to be ready to lead the industry in 5G across Europe, while significantly expanding our 4G coverage in emerging markets. In fixed we plan to continue to build out our NGN coverage where it is needed to compete, while upgrading our cable networks to deliver gigabit speeds.”

Vodafone said its internet of things (IoT) service is available in 30 countries, IP-VPN services are available in 70 countries and cloud and hosting services are available in 12 countries.

The company expects cloud-based technologies will be the key enablers of its strategy to enable it to deliver large cost savings and increased agility.

Vittorio Colao, group chief executive, said: “We have successfully concluded our Project Spring organic investment programme. This has transformed the quality of our technology, enhancing our customers’ experience and enabling us to expand our enterprise services.

“We are pleased to be the leader or co-leader in mobile network quality tests and Net Promoter Scores in the majority of our markets. We have also posted a record quarter of net additions in fixed as our convergence strategy continues to accelerate.

“Looking forward, we will continue to invest in our customer excellence programmes in both mobile and converged services. I am confident we will sustain our positive momentum in the coming year,” he added.