Vodafone sees TV numbers drop in well-performing Germany and rise in Spain

Vodafone saw a return to service revenue growth in its fiscal third quarter, including in its largest market Germany, and despite lacklustre performances in poorly performing markets including the UK and Italy.

In Germany, the company’s key market, Vodafone added 98,000 cable broadband customers, including 35,000 migrations from DSL. Overall, the company’s broadband base in creased by 56,000 to 10.9 million, despite the closure of retail stores.

That growth helped offset a decline of 75,000 TV customers, a significant number that was in part related to the ending of a specific bulk supply contract. The company said it was hit by the closure of retail stores, although it said that the launch of its Apple TV box and the DAZN pay TV offering had helped boost its premium TV performance.

Vodafone also said that it convergence play, the GigaKombi proposition, had continued to growth with 28,000 additions taking the total to 1.6 million.

In Spain, the other major European Vodafone market with a significant TV play, service revenue declined by 1.1%, an improvement on the previous quarter. In a market characterised by intense price competition in all segments, Vodafone lost 22,000 broadband customers, which it said was due to its pricing decisions and intensified competition. Nevertheless, Vodafone performed well in TV, adding 46,000 customers in Q3, boosted by its growing library of movies and TV services and its new boxless TV app offering.

Overall, Vodafone’s service revenue grew by 0.4% organically over the quarter to €9.35 billion, with growth in Germany and non-European markets offsetting declines in the UK, Italy and Spain.
Analysts at Jefferies gave Vodafone a buy rating, noting that the company did not have to count on lost mobile roaming revenue coming back or on competition diminishing of consumer expenditure expanding.

Jefferies said that its consumer data indicated a stronger intent to upgrade than spin down on the part of consumers and no indication of an increase in churn across Vodafone’s seven main markets.