 warned on Thursday that profits are expected to be on the lower-end of projections, following a slow fourth quarter.){kind=link}
Vodafone plc (LON:VOD) warned on Thursday that profits are expected to be on the lower-end of projections, following a slow fourth quarter.
The multinational telecommunications company experienced a slowdown in revenue for the final months of 2016, as its Indian operations continue to affect profit margins.
In addition to strain across its Indian businesses, its major UK market also reported a fall in revenue, as the company continues to face the effects of “heightened price competition” against its rivals. UK Vodafone profits fell by 3 percent for the quarter ending December.
The company continued to enjoy growth across its European and African markets, however, this was not sufficient to offset a slide in overall group revenue. Overall group revenue decreased by 3.9 percent to £10.8 billion for the third quarter, compared to the same period the year previously. In this regard, Europe fell 4.6 percent year-on-year, and similarly its African Middle East and Asia Pacific profits fell 2.4 percent.
Undeterred by the underwhelming figures, chief executive Vittorio Colao said:
“Our strong organic performance in South Africa and Turkey was partially offset by India, where the sector is affected by free services from the new entrant.
“We anticipate intense competitive pressure in India in the fourth quarter and are taking a series of commercial actions, including the extension of 4G services to 17 leading circles.”
Vodafone profits were ultimately boosted by strong consumer demand for 4G services, with growth in Spain and Italy.
“In Europe, service revenue growth continued, led by Italy, Germany and Spain. Mobile contract ARPU continued to stabilise, reflecting the successful adoption of our ‘more-for-more’ propositions, while we remain Europe’s fastest growing broadband company, illustrating our effective convergence strategy.” Mr Colao added.
Vodafone are currently in talks with Aditya Birla Group to negotiate a potential merger between its Indian division and Indian Idea.
Whilst Vodafone plc initially took a hit, shares are up 0.18 percent as of 11.07AM (GMT).