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Any losses were aligned with company expectations, Vodafone said
Vodafone has reported a 5% increase in total revenue to €9.8 billion in its Q3 trading update, fuelled by strong performances in the UK, Africa, and Türkiye. The company’s service revenue grew 5.6% to €7.9 billion. However, Vodafone’s German business was under pressure, with service revenue declining 6.4% after a regulatory change that ended bulk TV contracts for tenants.
The decline in Germany follows a major change in the country’s TV laws, which came into effect in July last year. Previously, landlords in multi-dwelling units (MDUs) could bundle cable TV services into tenants’ rent, meaning steady revenue for providers like Vodafone. However, the new law requires individual tenants to opt in and pay separately for their TV service, leading to significant customer losses. While Vodafone has managed to retain 49% of affected households, the shift has impacted on revenue.
Vodafone’s broadband business in Germany has also struggled, with a reduced customer base and pricing pressures causing a 10.7% decline in fixed service revenue. Competition in the mobile market has also intensified.
Despite challenges in Germany, Vodafone’s UK business saw service revenue growth of 3.3%, benefiting from significant investments in customer experience and broadband expansion. Africa also performed strongly, with a 11.6% increase in organic service revenue.
“We are continuing to invest in the turnaround of our German business and we are starting to see improving customer trends, although conditions have become more challenging in the mobile market,” said CEO Margherita Della Valle on Tuesday.
This quarter, Vodafone also completed the €8 billion sale of its Italian operations to Swisscom. The proceeds have been used to reduce net debt, they said with the company planning to return up to €2 billion to shareholders through share buybacks once its current program concludes.
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