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Higher UK prices at Vodafone and return of roaming charges offset German revenue fall

·2-min read
A Vodafone shop (REUTERS)
A Vodafone shop (REUTERS)

Higher prices in the UK and the return of roaming charges after Brexit stood out in an update from Vodafone, which came out just as customers are heading off on holiday amid the soaring cost of living.

Increased revenue from the FTSE 100 company’s UK operations, also driven by a recovery in business demand, helped it offset a decline in Germany, its biggest market, where recent legislation has made it easier for customers to switch contracts.

Price increases for UK contract customers and increased roaming charges for tourists entering the county after the end of Covid restrictions helped boost UK revenue by 6.5% year-on year, up from a rise of 2.0% a year ago. The number of fixed-line broadband customers reached 1.1 million, up by 22,000.

City analysts were focused on the company’s numbers out of Germany. Vodafone said sales there fell, by 0.5%, mainly due to a new telecommunications act, which made it easier for subscribers to cancel contracts.

A company spokesman told the Standard that plans are already in place to “streamline” the way in which it rolls over customer contracts and signs up new subscribers there. It expects that to mean an “improved showing” from its German business “over the rest of the year.” During the first quarter, its number of cable broadband customers fell by a further 34,000 and losses of broadband customers reached 30,000.

In the UK, the return of tourist visitors after the end of Covid restrictions boosted revenue from roaming charges and annual price rises for contract customers helped increase service revenue

Revenue also fell in Spain, by 3%, due to “promotional activity”. In Italy, service revenue fell by 2.3%. Inflation in Turkey helped increase revenue there by almost 36%.

Group service revenue rose 2.5%, up from 2% in the same period a year earlier.

“Whilst we are not immune to the current macroeconomic challenges, we’re on track to deliver financial results for the year in line with our guidance,” said Nick Read, group chief executive.

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