Mo­bile data de­mand helps Voda­fone lift profit fore­cast

The Daily Telegraph - Business - - Business - By Christo­pher Wil­liams

DE­MAND for re­li­able in­ter­net ac­cess and heavy in­vest­ment in its net­works have helped Voda­fone turn the tide against wi-fi across Europe, as it re­ported the pro­por­tion of data con­sumed by its cus­tomers over their mo­bile con­nec­tions in­creased for the first time in years. Wi-fi still ac­counts for the ma­jor­ity of data con­sumed on smart­phones, chief ex­ec­u­tive Vit­to­rio Co­lao ad­mit­ted, but faster and bet­ter mo­bile cov­er­age means pub­lic hotspots in cafes and ho­tels are now on their way out.

The shift was part of an up­beat hal­fyear re­port from Voda­fone, which up­graded its profit and cash flow fore­casts partly on the back of bet­ter-thanex­pected ser­vice rev­enues across Europe. Mr Co­lao said: “It is the first time we have raised Voda­fone’s or­ganic earn­ings guid­ance in re­cent his­tory.” The tele­coms gi­ant said it now ex­pects its full-year or­ganic earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (Ebitda) to in­crease by around 10pc to as high as €14.95bn (£13.4bn). That com­pares with its ear­lier fore­cast of 8pc growth to a max­i­mum of €14.5bn.

The shares closed up more than 5pc at 227p as the com­pany reaped the ben­e­fits of years of in­vest­ment in mo­bile up­grades and a push into fixed-line broad­band.

Voda­fone’s up­grade in­cluded some one-off ben­e­fits, such as a £100m cheque from BT’s net­work sub­sidiary Open­reach, which failed to pay com­pen­sa­tion for in­stal­la­tion de­lays. Mo­bile op­er­a­tors rely on fixed lines pro­vided by Open­reach to con­nect their masts.

Or­ganic ser­vice rev­enues, the mea­sure of Voda­fone’s core sales, were up 1.7pc in the first half to €20.6bn. Ex­clud­ing the im­pact of price cuts im­posed by reg­u­la­tors the in­crease was 2.6pc.

There was a slow­down in the sec­ond quar­ter driven by the com­pany’s African and Mid­dle East op­er­a­tions. In Europe mo­men­tum was main­tained, how­ever.

On a statu­tory ba­sis rev­enues were down 4pc to €23.1bn as Voda­fone de­con­sol­i­dated its Dutch mo­bile arm to merge it with Lib­erty Global’s cable busi­ness in the Nether­lands.

Vit­to­rio Co­lao, chief ex­ec­u­tive, said bet­ter mo­bile cov­er­age means wi-fi hotspots are not so pop­u­lar

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