European Recovery Will Hasten Earnings Growth —Vodafone

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VODAFONE said its recovery would accelerate this year after investment in faster networks boosted demand in Europe and helped the group return to underlying revenue and core earnings growth for the first time since 2008.

Chief Executive Vittorio Colao said a strong year for the world’s second mobile operator had been capped by a recovery in the final quarter in Europe, its largest region which has taken more than five years to nurse back to health.

“We achieved the first quarter of positive revenue growth in Europe since December 2010,” he said on Tuesday.

In Germany, Vodafone was “back in game” against former incumbent Deutsche Telekom, while Italy, another laggard, also recovered in the final quarter, he said.

Its performance in its home market was marred by problems with a new billing system. Colao said the business should be back to normal in the second half of the year.

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The company has been spared the drop to fourth place in the consumer market in Britain after Europe on May 11.

Colao said the European Commission had no choice but to block the merger between rivals Telefonica’s O2 and Hutchison’s Three because they were in separate network infrastructure sharing agreements with Vodafone and market leader BT’s EE.

The ruling does not bring any certainty to the market, with the future of both companies in Britain in doubt.

“My sense is that there will be commercial alliances, possibly deals,” he said.

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