Vodafone price hikes help lift sales while profit slumps

Mobile phone giant Vodafone has revealed a slump in its half-year profit despite a 4.2% increase in service revenues
Mobile phone giant Vodafone has revealed a slump in its half-year profit despite a 4.2% increase in service revenues

VODAFONE has reported rising service sales after hiking prices but revealed a slump in its half-year profit.

The mobile phone giant has been steaming ahead with an overhaul which has seen it shed thousands of jobs this year.

It reported a 4.2% increase in service revenues - meaning the income from its global telecoms services - in the six months to September, compared with the same period last year.

The uplift was driven by growth in Europe and Africa, with sales ticking up in Germany, the group's largest market.

Vodafone raised broadband and mobile prices in Germany, which it said led to it losing hundreds of thousands of customers but helped boost revenues per customer.

It also saw higher contract prices help boost mobile service sales in the UK, and said it grew its customer base for spin-off digital brand Voxi, which offers unlimited social media use on all its plans.

But the company swung to a pre-tax loss of £550 million over the half year, compared with a profit of £1.7 billion this time last year.

The firm, which is planning to merge its UK business with Three UK, is set to cut about 11,000 jobs across the global group over three years amid plans to improve its performance.

Around 2,700 job cuts were completed over the latest period, the company revealed.

The merger with Three UK is expected to be completed before the end of next year, which it says will give customers greater choice and more value, and drive competition in the market.

However, the move has led to criticism from consumer group Which? which warned that it risks raising prices and lowering service quality for customers.

The telecoms giant has also been freeing up cash by selling off parts of the business.

Last month it agreed to sell its Spanish arm for £4.4 billion, and it has previously agreed to sell its Hungarian and Ghanaian divisions.

Margherita Della Valle, Vodafone's group chief executive, said: "During the first half of the year, we have delivered improved revenue growth in nearly all of our markets and have returned to growth in Germany in the second quarter.

"Vodafone's transformation is progressing. Our focus on customers and simplifying our business is beginning to bear fruit, although much more needs to be done."