Vodafone Group (NASDAQ: VOD), based in London, reported top-line growth in Q3 FY25, for the quarter ending December 31. The company’s total revenue in the quarter increased by five percent year-over-year to $10.2 billion, while the Group’s service revenue grew by nearly six percent to $8.2 billion. Vodafone operates mobile and fixed networks in various countries in Europe and Africa, along with Turkey. The company reported that growth was broad-based, with positive trends in the U.K. and Africa, partially offset by declines in Vodafone Germany, its largest operator and revenue producer in Europe.
In 2024, Vodafone initiated two key transactions intended to streamline operations and improve financial performance: a merger with Three in the U.K. and selling Vodafone Italy, as reported by Inside Towers. In December 2024, the U.K.’s Competition and Markets Authority approved the merger with Three UK, which is expected to be formally completed in the coming months. The sale of Vodafone Italy to Swisscom AG for $8.3 billion in cash was finalized on December 31.
“When the U.K. merger completes in the next few months, we will have fully executed Vodafone’s reshaping for growth,” commented Margherita Della Valle, Vodafone Group Chief Executive. “We are on track to grow in line with our full-year guidance for this year and are looking forward to a stronger Vodafone in the years ahead.”
In Germany, service revenue declined by six percent year-over-year, primarily due to the impact of a TV law change and lower broadband service revenue. At the end of the quarter, Vodafone Germany had 29.4 million mobile subscribers and 10.1 million fixed broadband customers, both experiencing low single-digit year-over-year declines.
Vodafone U.K. service revenue growth accelerated by eight percent year-over-year. The company attributes this growth to significant investments made to improve customer experience, driving growth in the consumer market.
During Q3, service revenue growth in other European markets remained stable at two percent year-over-year. In Turkey, service revenue growth was substantial, increasing by 97 percent in dollar terms, excluding the hyperinflationary adjustment.
By the end of the quarter, Vodafone’s operations in Africa served nearly 165 million mobile subscribers, up six percent from 155 million at the end of Q3 FY24. Growth was supported by an acceleration in South Africa and above-inflation growth in Egypt, driven by demand for mobile data and financial services, offered at attractive prices.
Group Adjusted EBITDAaL increased by one percent year-over-year to $2.9 billion, as service revenue growth in most markets and lower energy costs in Europe more than offset the impact of the TV law change in Germany. However, operating profit declined by over 18 percent year-over-year to roughly $1.1 billion.
Vodafone reiterated its guidance for FY25, ending June 30, stating it is on track to deliver Group Adjusted EBITDAaL of about $11.4 billion and Group Adjusted free cash flow of at least $2.5 billion.
By John Celentano, Inside Towers Business Editor
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