Vodafone shares jump as new offerings prompt improved outlook

Tue Nov 11, 2014 11:47am EST
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By Kate Holton

LONDON (Reuters) - Vodafone (VOD.L: Quote), the world's second-biggest mobile operator, nudged up its full-year earnings forecast on Tuesday as improving demand in its big European markets and an investment push into new products helped reduce a drop in revenue.

Faced with increased competition from entertainment groups and fixed-line providers, Vodafone also said it plans to launch a broadband and TV service in its British home market to compete with rivals who offer a wider range of products.

The improvement in trading, which sparked hopes of a return to growth in its key revenue measurement by early next year after more than two years of falls, sent its shares up 6 percent to a six-month high.

"There is growing evidence of stabilisation in a number of our European markets," said Chief Executive Vittorio Colao. "Our two-year, 19 billion pound investment programme is well underway and customers are beginning to see the benefits."

Vodafone has embarked on a programme to either build or buy superfast fixed-line broadband networks across Europe, to enable it to compete with rivals offering mobile contracts alongside television, broadband or fixed-line deals.

Vodafone said it would launch a consumer broadband offering with a TV package in Britain supported by its Cable & Wireless fibre network which it currently offers to corporate customers. The additional services will help it to compete with BT (BT.L: Quote) which is due to launch a consumer mobile service next year.

Vodafone said it was not looking to spark a price war in its highly competitive home market but to defend its position and keep hold of existing customers.


Vodafone branding is seen outside a retail store in London November 12, 2013.   REUTERS/Toby Melville