Bloomberg News

Vodafone’s Spain Revenue ‘Still Suffering’ Amid Economic Woes

October 10, 2011

Oct. 10 (Bloomberg) -- Vodafone Group Plc, the world’s biggest mobile-phone operator, is struggling to stop a decline in Spanish sales as the intensifying euro crisis pushes customers toward cheaper alternative rivals.

“Looking at our figures, we’re still suffering in revenue due to the declines in voice sales, which are driven by lower prices,” Francisco Roman, Chairman of Vodafone Spain, said in an interview in Madrid today. “Our main challenge is to stop the damage in revenue.”

Vodafone, based in Newbury, England, is due to report fiscal second-quarter revenue for the three months through September on November 8.

Spain, with the highest unemployment rate in Europe, last week had its credit rating cut two levels by Fitch Ratings, which cited the “intensification” of the euro crisis, slower Spanish growth and regional finances as risks to the nation’s debt outlook. Vodafone Chief Executive Officer Vittorio Colao said in July that the company decided to cut prices in the country to be more competitive.

Vodafone is still seeing growth from both prepaid and contract deals and is “optimistic” about the future as the Spanish market has “room for growth,” Roman said.

Asked about a potential market consolidation, the executive said “there’s a consolidation trend around the world and that’s a response to a need of economies of scale. Spain is no different.”

In the fiscal first quarter through June, Vodafone’s service revenue in Spain excluding currency swings and acquisitions had declined by 9.9 percent, accelerating from a 6.9 percent drop in the 12 months ended March 31. The decline in Spain compared with growth of 32 percent in Turkey, 17 percent in India, 1.7 percent in the U.K. and 0.2 percent in Germany, the company’s biggest market.

--Editors: Simon Thiel, Kenneth Wong.

To contact the reporters on this story: Manuel Baigorri in Madrid at mbaigorri@bloomberg.net; Jonathan Browning in Brussels jbrowning9@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net Kenneth Wong at kwong11@bloomberg.netvroot@bloomberg.net;


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