The first quarter brought a 3.7% increase in service revenue for Vodafone, largely attributable to the enhanced outcomes in the UK, Italy, and Germany. Although the pandemic caused many customers to disconnect in the UK, Vodafone’s customer base remained stable due to an increase in consumer clients and price hikes, leading to a 5.7% growth in service revenue.
Germany, which contributes the largest portion of the group sales, saw service revenue dip by 1.3%. But this marks a substantial improvement from the earlier quarter’s 2.8% decline, indicating sequential progress. Vodafone attributes this recovery to increased broadband prices introduced in May, which compensated for customer losses.
Going over to Italy, the decrease in service revenue slowed from 2.7% in the fourth quarter to 1.6% in Q1. This improvement is credited to the mobile prepaid base stabilizing and robust expansion in corporate fixed-line operations alongside new digital services.
Although these figures aren’t eye-popping, they indicate an element of steadiness and positive momentum for Vodafone during a crucial phase.
Vodafone CEO Margherita Della Valle remarked during a statement, “As we progress our plans to transform Vodafone, we have achieved a better service revenue performance across almost all of our markets. We have delivered particularly strong trading in our Business segment and returned to service revenue growth in Europe,”.
Della Valle, who is relatively new in her position as CEO, is spearheading a turnaround strategy that includes reducing the workforce by up to 11,000 and a £15 billion plan to merge its UK operation with competitor Three. As she carves out a path for Vodafone, shareholders are scrutinizing every move to ensure the company is heading in the right direction.
Despite Vodafone’s share prices falling by more than 40% compared to last year, a slight 4% increase in share value suggests that investors are somewhat encouraged by these figures. The new CFO, Luka Mucic, is expected to play a crucial role in turning things around for Vodafone. Mucic, who brings extensive experience from his tenure at business software leader SAP, will be joining the company at a pivotal stage in its transformation journey.
In summary, Vodafone’s first-quarter protocol paints a picture of a company slowly, but confidently making progress in key markets despite enduring challenges. Its journey toward transformation, under the new leadership of Della Valle and Mucic, brings with it cautious optimism as Vodafone strives to reclaim its former glory. The challenge now is to sustain this momentum in the long run.