Vodafone quarterly mobile data revenue grows by 25 per cent

Data traffic is driving revenue growth at Vodafone, as revenue from voice services begins to decline in Europe

Vodafone reported third-quarter service revenue up 2.5 per cent year on year, but its mobile data revenue rose much faster, up 25.3 per cent. At 11.7 per cent of group service revenue, mobile data is now on the point of overtaking Vodafone's cash-cow text-messaging business.

Third-quarter service revenue totalled £10.6 billion ($US17.2 billion as of Sept. 30, the last day of the period reported), with £6.85 billion of that from voice services, £1.26 billion from messaging and £1.24 billion from data.

Vodafone attributed the rise in mobile data revenue to increased interest in new services such as payment by phone, and the arrival of connected mobile devices for homes and cars, in addition to the usual suspects, smartphones and tablets.

While voice revenue continued to grow in Asia and Africa, it declined in Europe, which accounts for around two-thirds of Vodafone's business, leading to an overall 2.6 per cent decline in voice revenue. Revenue from messaging services grew 1.5 per cent in Europe, and that from data services 18.6 per cent -- but 43.8 per cent in Asia-Pacific and the Middle East, for an overall data revenue growth rate of 25.3 per cent.

The mobile phone operator is refocusing on its operations in Europe, Africa and India: It recently sold its operations in China and on Tuesday announced it will speed up divestiture of the last of its interest in the Japanese business it agreed to sell to Softbank in 2006.

Earnings per share for the six months to Sept. 30 were the highest the company has ever reported, it said, boosted by the sale of its stake in China Mobile.

On six-month revenue of £22.6 billion, the company reported a decline in net profit to £5.2 billion, compared to revenue of £21.8 billion and profit of £6.1 billion a year earlier. The company does not report profit on a quarterly basis.

Vodafone was more optimistic about the future, raising its expectations for operating profit to between £11.8 billion and £12.2 billion for the 12 months to March 31, 2011, encouraged by strong performance at U.S. operator Verizon Wireless, in which it owns a minority stake.

It expects revenue to continue to grow at between one per cent and four per cent per year.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

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