London-based mobile phone giant Vodafone Group plc reported strong interim results for the six months ended Sept. 30, including a 55-percent increase in proportionate customer additions compared with the same period last year, bringing the company’s proportionate customer base to 65.5 million subscribers.
Proportionate earnings before interest, tax, depreciation and amortization also rose 24 percent from the previous year to $4.7 billion before exceptional items, at the high end of analysts predictions. Operating profits increased 19 percent to $3.3 billion.
“These first half results clearly demonstrate that, even with the better than expected growth in customer numbers, the Group continues to report strong increases in profitability in all its operating regions,” said Chris Gent, chief executive of Vodafone. “In addition, we are particularly encouraged by the initial trends we are seeing with respect to mobile data and Internet usage, even prior to the introduction of the more user friendly, enhanced technologies that we will be rolling out during the course of the next year.”
Mobile data, including Short Message Service, data and Internet services, accounted for 5.5 percent of Vodafone’s average revenue per user during the period, equivalent to annual proportionate revenue of more than $1.4 billion, according to the company.
Vodafone’s stock, which has fallen 17 percent this month, took to the strong earnings, rising 10 percent on the London exchange to $3.78 per share following the news last Tuesday.
Vodafone also predicted its second half results would improve on its latest results due to lower than expected costs associated with purchasing third-generation licenses across Europe. Original estimates had the company spending between $35 billion and $42 billion for licenses after the U.K. auction in April. Vodafone now expects to spend between $15 billion and 17 billion for licenses.
“With the majority of UMTS licenses now purchased, and our disposal program largely complete, the strength of our balance sheet will enable us both to continue to fund the ongoing needs of the business and at the same time take advantage of opportunities to expand strategically and geographically as they arise,” Gent added.
That planned expansion is expected to include Asia where Vodafone currently holds minority ownership in Japan’s J-Phone and South Korea’s Shinsegi. Gent told the Wall Street Journal that the company expects to make acquisitions in the region within the next six months, but that plans were being held up due to the reluctance of many Asian companies to cede controlling stakes to foreign firms.
In addition to its current Asian holdings, Vodafone owns interests in 24 wireless operators around the world including Verizon Wireless in the U.S. and a recently purchased 25 percent stake in Switzerland’s Swisscom Mobile ahead of that country’s upcoming 3G license auction.
