Vodafone closes the first quarter with the largest drop ever in services revenues and decides to suspend the £ 2,1 billion dividend linked to US operations.
The decline in organic service revenues was 4,2%, in line with expectations but not so large since 2003, when the company began making this measurement. The most marked decrease was recorded in Southern Europe, where all operators are engaged in a tariff-cutting strategy aimed at stemming the weakness in consumption.
In Italy revenues from services contracted by 12,8% in the quarter, in Spain by 11,5%. Vodafone also booked a £1,8bn charge on its Italian and Spanish assets, bringing total impairments on the two countries to £7,7bn year-to-date.
The world's number two mobile phone group also recorded the first year-on-year decline in revenues since 2005 (-4,2% to £44,4bn). On the other hand, the operating result was above the guidance: +9,3%, to 132 billion pounds thanks to the strong performance of the US market, where Vodafone controls 45% of Verizon Wireless.
Precisely this participation is at the center of intense speculation on a possible sale to the current partner Verizon Communication. However, the managing director Vittorio Colao specified that there is nothing new to communicate on the matter.
