Vodafone reports decline in sales. In its report for the three months to the end of December (third quarter of the 2023 financial year), the telecom group does not reveal what this means for profits. With its services, Vodafone turned over 9.5 billion euros in the three months, a decrease of 1.3 percent compared to the same quarter of the previous year.
Other income grew by four percent to 2.1 billion euros, which means that there was a total decrease of four per thousand to 11.6 billion euros. Other sales include income from interest, the sale of devices and accessories, fees when opening a contract and rentals, especially the rental of cellphone transmitter stations by the subsidiary Vantage Towers.
For Germany, Vodafone Germany reports 3.3 billion euros in sales, a decrease of 1.8 percent. Fixed-line revenue fell slightly more (-2%) than mobile revenue (-1.7%). In the fixed network, price increases have led to 25,000 cable and 14,000 DSL customers looking for another provider (net, i.e. after deduction of newly won customers). In addition, 112,000 German households canceled their TV subscriptions with Vodafone. Half of the remaining Vodafone broadband customers are now paying for at least 250 Mbit/s download bandwidth, the company reports.
In the mobile communications market, Vodafone has lost two major contracts with authorities. At the same time, the distribution model is shifting towards channel partners who want to be paid and virtual network operators (MVNOs) who make less and have higher churn rates. In total, Vodafone’s termination rate has increased by one percentage point to 13.3 percent of all mobile customers. For the remaining direct customers, Vodafone relies on price increases.
Vodafone leaves Hungary, pushes Egypt to Vodacom
According to the financial report, the decline in sales was higher in Italy (-3.3%) and Spain (-8.7%), while Vodafone UK reported an increase of 5.3 percent. The other European Vodafone markets (Albania, Greece, Ireland, Portugal, Romania, the Czech Republic and Hungary) all reported revenue growth with the exception of Romania, a combined increase of 2.1 percent.
The Hungarian mobile and cable network has not belonged to the group since Wednesday. Vodafone Hungary was sold and (partially) nationalized. The background is a significant tax increase in the country. Only the Hungarian VOIS branch (VOdafone Intelligent Services) remains in the group.
Conversely, Vodafone increased its stake in the African group Vodacom from 60.5 percent to 65.1 percent in mid-December. This took place through the transfer of Vodafone Egypt to Vodacom, for which Vodafone was able to gain Vodacom shares on the one hand and 577 million euros on the other. From the financial year 2024, which begins in April, the Egyptian subsidiary will also be consolidated from Vodacom’s accounts. Incidentally, Vodacom was able to increase its sales by 3.5 percent.
Vodafone Ghana is the only remaining direct subsidiary in Africa. Vodafone calculates its sales with Egypt and Turkey and reports a jump in sales of no less than 34.1 percent. However, this is due to the enormous inflation in Turkey, a result of President Recep Tayyip Erdoğan’s unconventional interest rate policy.
Unrest at Vantage Towers
Vantage Tower is a publicly traded company that operates and leases cell phone base stations to network operators. Vodafone is the majority owner and recently made a takeover bid for all shares together with the financial investors Global Infrastructure Partners (GIP) and Kohlberg Kravis Roberts & Co (KKR). Some of the remaining shareholders accepted the offer, so the joint venture of the three companies will hold 89.3 percent of Vantage shares. The joint venture is called Oak Holdings GmbH.
However, billionaire Paul Singer recently secured 5.61 percent of the shares through his fund Elliott Investment Management. This causes unrest, since Elliott is a notorious “activist” who tries to persuade management to make changes that are more profitable for him. What Elliott specifically desires is not yet publicly known.
Vodafone reports that Vantage Towers sales increased from to 329 million euros (+5.4%). Vantage itself reported sales adjusted for amounts passed on to third parties of 264 million euros (+4.8%), of which 129 million euros come from Germany. It should be noted that Vodafone itself is Vantage Towers’ biggest customer. With other network operators, Vantage Towers has only turned over 44.5 million euros (+3.2%) in Europe, plus a further 6.5 million euros (+141%) with a Spanish consortium consisting of Vodafone and Orange.
(ds)
To home page
