Vodafone Sees Economic Slowdown

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Mobile network operator Vodafone Group reported sales in line with analysts' expectations, but slightly lowered its outlook going forward.

Vodafone now expects revenue to be around the bottom of the range £39.8 billion to £40.7 billion (US$79.4 billion to $81.2 billion) for the full year. It blames economic weakness, and singles out Spain as one of the most problematic markets. The company still expects operating profit to end up between £11.0 billion to £11.5 billion for the full year, mainly because of cost savings.

Sales for the quarter ending June 30 were £9.8 billion, up 19.1 percent compared to last year. Organic growth, which excludes acquisitions, for example, was 1.7 percent, the company reported Tuesday.

Among the highlights for the quarter, data revenue for the group rose 50 percent, while in India Vodafone's voice and data revenue grew more than 50 percent.

However, voice revenue across the group declined by 3.6 percent compared with the same quarter last year, as per-minute rates were driven down by price competition and regulation, notably of termination rates and roaming prices, according to Vodafone.

The report is CEO Arun Sarin's last hurrah, since he will step down on July 29 after five years as the head of Vodafone, to be replaced by his deputy Vittorio Colao.

Vodafone now has 269 million subscribers, an increase of 8.5 million during the quarter.

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