Vodafone struggles in Italy, Germany, but holds guidance

Telecoms giant Vodafone held full-year guidance as it reported a fall in third-quarter service revenues, driven largely by declines in Germany.

The company on Monday said service revenues fell 1.4% to €9.3bn on a reported basis. Service revenue growth in Germany was down 0.3%.

Vodafone added that it was still in active talks on a potential merger for its Italian operations after rejecting a deal with rival Iliad in Italy last month.

Service revenue in Italy fell by 1.3% in the third quarter against a 1% drop in the prior three months.

“Vodafone’s third quarter had some pockets of optimism for investors to cling to. Growth was in line with the second quarter, arguably a better result than some had feared," said Matt Britzman, equity analyst at Hargreaves Lansdown.

"The key German market managed to scrape its way into growth territory but saw a slowdown. Comparisons to the second quarter were always going to be tough, with some non-recurring revenue streams not repeating."

"Regulatory changes in Germany are set to kick in this year, adding a layer of uncertainty to operations in the region."

Reporting by Frank Prenesti for Sharecast.com