Weak pound boosts Vodafone results

Vodafone Group's revenue rose 14.3% year on year for the quarter ended Dec. 31, in large part thanks to a weak pound. Excluding the favorable exchange rate and acquisitions, revenue would have declined by 1%, the mobile operator reported Tuesday.

Sales for the third quarter of Vodafone's fiscal year totaled £10.47 billion ($14.9 billion as of Dec. 31, the last day of the period reported), slightly better than analysts had expected. Of the 14.3% revenue growth, 12.8% came from exchange rate movements as the pound declined against world currencies.

The favorable exchange rate also allowed Vodafone to increase its revenue outlook for its full fiscal year, which ends on March 31. It now expects revenue between £40.6 billion and £41.5 billion, while in November it said it expected between £38.8 billion and £39.7 billion.

Spain continues to be a sore spot for Vodafone, but a decline here was partially made up in the Asia-Pacific region, the Middle East, Asia, Africa and Central Europe.

Data revenue is growing at around 25% a year on average, and over 50% in some areas, while revenue from voice calls fell by about 3%. However, at £768 million for the quarter, data revenue still represents a relatively small proportion of the group's revenue.

The continuing data growth is good news for Vodafone, but voice is still the cash cow. Vodafone can't afford to lose focus on voice as data grows in importance, according to Katja Ruud, research director at Gartner.

The number of voice minutes is still growing, but not as fast as it used to, Ruud said.

Vodafone's large scale will be both an opportunity and a challenge. It has to make the most of its size -- using it to, for example, offer better roaming pricing than the competition -- and at the same time keep up with the rapidly developing mobile market, according to Ruud.

The IDG News Service is a Network World affiliate.