A day after announcing a new chairman, Vodafone (NYSE: VOD) reported a growth in revenue — and especially data revenue — after seeing record smartphone adoption and the introduction of tiered pricing in eight of the markets in which it operators. Vodafone — the world’s largest mobile operator by sales — said turnover stood at £11.9 billion ($19.3 billion) for the quarter ended December 31, 2010, growing three percent compared to the same quarter a year ago.
In interim results reported today, revenues from Europe stood at £8.3 billion ($13.5 billion), a decline of 1.9 percent. But Africa, Middle East and Asia Pacific saw growth of 17.6 percent to £3.3 billion ($5.7 billion). Part of the slow growth in Europe, Vodafone said, was down to continuing economic weakness in southern European markets like Spain.
Voice is still making up the majority of revenues at Vodafone, but the balance between the two is changing: voice revenues were actually down by 1.4 percent to £8.3 billion ($13.4 billion), while data grew by 27.2 percent to £1.3 billion ($2.1 billion). On an annualised basis, data revenue will be over £5 billion ($8 billion); Vodafone notes that this will be the first time it has exceeded messaging revenue.
Smartphones and data growth: Europe is, unsurprisingly, leading the pack in smartphone performance. Vodafone says that smartphone penetration among its European customers now stands at 17 percent. Smartphone users, combined with tiered data plans in eight markets, have contributed to a 23 percent increase in data revenue in the region. Vodafone says that it intends to roll out tiered data to the rest of its markets this quarter (Q4).
Turkey was one of the standout markets this past quarter, with data revenues from data rising by 155 percent, contributing to a 32 percent rise in revenues in the country.
Vodafone says it anticipates adjusted operating profit to be “towards the upper end of the £11.8 – 12.2 billion range” it noted last November. But it also points out that this is does not take into account Verizon’s iPhone launch.
Verizon’s new deal to sell the iPhone may end up having a short-term negative impact on Vodafone, which owns 45 percent of Verizon Wireless: the operator is expected to shift some 2.5 million devices this year at the lowest estimate, but a lot of them will be subsidised to encourage users to take up two-year contracts. Those contracts will, of course, offer much better dividends over time. Vodafone says it will update on the impact in May. (Slides, Release)