Vodafone Reports Earnings, German Market Challenges Linger
London, UK - Vodafone, the European mobile group, reported a decline in revenue in its third quarter, primarily driven by an ongoing downturn in Germany, its largest market.
Shares in Vodafone opened over 6% lower, eroding gains made over the past year.
Germany's service revenue dropped by 6.4% during the quarter, worsening from a 6.2% decline in Q2. The company attributed this primarily to a change in pay-TV regulations and heightened competition in the mobile sector.
Despite the German setbacks, Vodafone's service revenue accelerated to 5.2% for the three months ending December, bolstered by strong performances in the United Kingdom, Turkey, and Africa.
"We continue to invest in our German business, and we are observing positive customer trends," said CEO Margherita Della Valle. "However, conditions have become more challenging in the mobile market."
Vodafone has been impacted by the termination of bulk pay-TV contracts in apartment complexes in Germany, which took effect in July 2024. The company has lost over half of its affected customers, resulting in a base of 4.1 million households by December 2024.
In the United Kingdom, where Vodafone's merger with Three is nearing completion, service revenue grew by 7.6%, driven by customer acquisitions in mobile and broadband.
Vodafone maintained its full-year forecast, anticipating core earnings of around €11 billion and adjusted free cash flow of at least €2.4 billion.