Vodafone UK sales ramp up as Three merger set to complete in ‘next few months’
Vodafone UK sales ramp up as Three merger set to complete in ‘next few months’
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Mobile phone giant Vodafone has revealed a rebound in UK revenues as it eyes the completion of its £15 billion mega-merger with Three UK in the coming months. The firm saw UK organic service revenue growth accelerate to 3.3% in its third quarter, up from 1.2% in the previous three months. It put this down to “significant investments we have made to our customer experience”, while UK mobile service revenues returned to growth in the quarter – up 1.8% – as it added more customers.
But Germany – its largest market, accounting for 34% of group service revenues – saw worsened trading as total sales fell by 7.6% to 3.1 billion euros (£2.6 billion) and service revenues dropped 6.4%. The German division has been hit by a law that has barred housing associations from bundling TV packages with rent. The update comes as Vodafone prepares to finalise its tie-up with Three UK in the “next few months” after getting the green light from regulators at the end of last year in a deal that will create the UK’s largest mobile operator, with some 27 million customers.
Group chief executive Margherita Della Valle said: “When the UK merger completes in the next few months, we will have fully executed Vodafone’s reshaping for growth. “We are on track to grow in line with our full-year guidance for this year, which we reiterate today, and are looking forward to a stronger Vodafone in the years ahead.”. On the weaker-than-expected performance in Germany, she said: “We are continuing to invest in the turnaround of our German business and we are starting to see improving customer trends, although conditions have become more challenging in the mobile market.”.
The robust results in the UK helped the overall group post revenue growth of 5% to 9.8 billion euros (£8.1 billion), with a better-than-forecast 5.2% jump in service revenues. The UK merger forms a part of Ms Della Valle’s turnaround plan at the company, which also includes selling businesses in Italy, Spain and other countries. However, in order to address competition concerns in the UK with regulators, Vodafone and Three UK agreed to invest billions in rolling out a combined 5G network across the UK.
