Wall Street Journal
February 3, 2011
By LILLY VITOROVICH
LONDON—Vodafone Group PLC on Thursday reported solid third-quarter revenue, driven by an explosion in customers' data usage and strong free-cash-flow generation.
Vodafone posted a 2.1% rise in group service revenue—one of the key figures tracked by U.K. analysts—to £10.96 billion ($17.74 billion) for the three months ended Dec. 31, underpinned by growth in India, Turkey, the U.K. and South Africa. It is the fifth sequential quarter of improvement.
Vodafone said revenue from data services grew 27% due to "strong smartphone and mobile connectivity sales." On an annualised basis, Vodafone's data revenue is more than £5 billion, and has exceeded messaging revenue for the first time. Third-quarter group revenue rose 3% to £11.89 billion from a year earlier.
"Our performance has been driven by the effective execution of our strategy to strengthen our businesses and deliver growth, particularly in data services and emerging markets," Chief Executive Vittorio Colao said.
Vodafone, which appointed a new chairman a day earlier, said adjusted operating profit for the full year is now expected to be at the upper end of a range between £11.8 billion and £12.2 billion.
Free cash flow before licence and spectrum payments and one-off tax-related payments was £1.1 billion, lower than last year due primarily to working-capital movements. The company posted cumulative free-cash-flow generation of £4.6 billion, consistent with Vodafone's expectations of free cash flow of more than £6.5 billion during the 2011 fiscal year.
Vodafone didn't provide profit figures for the third quarter but will report full year results on May 17.
At Verizon Wireless, in which Vodafone holds a 45% stake, service revenue rose 7% in the third quarter, driven by net customer growth and higher data revenue.
Vodafone Wednesday appointed Royal Philips Electronics NV's chief executive and president, Gerard Kleisterlee, as its new chairman, succeeding John Bond, who came under fire from some shareholders last year over the mobile giant's strategy and track record on acquisitions.
Vodafone shares have risen 30% during the past 12 months, outperforming London's FTSE 100 index, which has risen 13% over the same period.
I especially related to this article because I was just recently in Ireland and I saw how popular Vodaphone was across the pond. It is undoubtedly because of such a rise is smartphones worldwide. They said that data plan's accounted for a significant number of sales and I would expect since smart phones are so popular in the US is comes to no shock that they would be popular in Europe and other parts of the world as well.
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