Vodafone Italia closed the quarter ended 31 December 2018 with revenues from services at 1.260 million euros (-4,6%). The decline slows down compared to previous quarters (Q1: -6,5%, Q2: -6,3%).
"The financial performance of the quarter was affected by the effects of regulation and competitive pressure on the mobile segment - specifies the company in the quarterly note - partially offset by the growth in revenues and the fixed network customer base".
The number of 4G customers reached 12,4 million, up 9,2% on the first quarter of the previous year (+1 million customers). The 4.5G network is available in 23 cities, 22 of which at 1Gigabit per second. The coverage of the 4G network reaches 98,2% of the population in over 7.241 municipalities, of which over 2400 in 4G+.
Revenues from fixed network services reached 281 million euros (+11,3%). The growth of fixed network customers continued with 2,9 million customers, of which 2,7 million in broadband, up 12,5% compared to the first quarter of the previous year (+299.000). Fiber customers stood at 1,5 million, with an increase of 553.000 customers compared to the first quarter of the previous year (+55,8%).
Fiber services are available in 1.987 Italian cities, of which 65 are covered by fiber at up to 1 Gigabit per second, through the partnership with Open Fiber.
Vodafone's second brand – Ho, launched in June to respond to the needs of customers interested in an essential offer – has reached almost 1 million customers.
At group level, Vodafone reported a 6,8% drop in revenue to €11bn. The result, explains the company, is due to the adoption of IFRS 15 accounting standards, the sale of the Qatari assets and the unfavorable exchange rate trend. Over the same period, organic services revenue growth was 0,1%. The group reiterated its Group Adjusted EBITDA organic growth target of around 3% and free cash flow, before capex, of €5,4 billion.
Europe was stable, with service revenues down 1,1% to €7,5 billion, “reflecting improved financial and customer trends in Italy, robust retail growth in Germany, a reduction of unemployment in Spain and a strong performance in the United Kingdom”. The group confirms its guidance with organic adjusted EBITDA growth expected at 3% and a free cash flow of approximately 5,4 billion.
“We achieved good momentum this quarter and improved the performance of our commercial performance. However these elements have not yet been reflected in our financial results. We enjoyed good growth in emerging markets with the exception of South Africa. Overall, this performance underpins our confidence in achieving our year-over-year target,” said Chief Executive Officer Nick Read.
“We are moving to implement a radically simpler operating model and to accelerate our digital transformation – added the new CEO with an eye to the future – We are also evaluating the opportunities in our markets to improve the use of resources through partnerships. This week we announced our intention to extend our network sharing agreement with Telefonica O2 in the UK to include 5G services. Once these agreements are finalised, we also intend to explore opportunities to enhance the tower assets in the UK”.
In mid-morning, the Vodafone share on the London Stock Exchange dropped 2%.
