Vodafone sales improve as it raises mobile and broadband prices

Mobile phone giant Vodafone has reported an improvement in sales growth over its first quarter after increasing prices, despite losing customers in its biggest market.

The company also announced the appointment of a new finance chief as it progresses with a three-year cost-cutting plan and a mega-merger with Three UK.

The firm’s total revenues fell by 4.8% on a reported basis to 10.7 billion euros (£9.3 billion) in the the three months to the end of June.

However, on a like-for-like basis, which factors in the disposal of its Hungary and Ghana divisions last year, sales jumped by 3.7% over the period.

In Germany, its biggest market, sales slipped by 1.3%, although it marked an improvement from the previous quarter.

Vodafone said the decline was driven by the “cumulative impact of customer losses over the past 18 months”, including fewer broadband and TV subscribers and a slimmer mobile customer base.

But it was partially offset by raising its broadband prices, which started to take effect from May.

While the price rises have boosted sales, Vodafone said they resulted in the loss of around 121,000 customers in the region.

Meanwhile, like-for-like service revenues jumped by 5.7% in the UK to 1.4 billion euros (£1.2 billion).

The uplift was helped by annual price increases and a higher customer base, having increased contract prices from April.

Vodafone said people tied to mobile contracts saw yearly prices go up by between £2 and £3 on average, excluding vulnerable customers and those tied to social tariffs.

It comes after Vodafone UK last month unveiled a mega-merger with rival mobile network Three UK, which will create Britain’s biggest mobile phone network worth £15 billion.

Former chief financial officer Margherita Della Valle took over as chief executive at the start of the year after the departure of Nick Read, and is leading the business through a three-year cost-cutting plan.

It includes plans to axe 11,000 jobs across the group, which will affect its UK headquarters in Newbury, Berkshire, as well as markets worldwide.

On Monday, Vodafone also announced the appointment of new chief financial officer Luka Mucic, who is set to take over from September 1.

Ms Della Valle said: “Luka is joining us at a critical time as we undertake the transformation of Vodafone.”

She added: “As we progress our plans to transform Vodafone, we have achieved a better service revenue performance across almost all of our markets.

“Looking ahead, we have taken the first steps of our action plan focused on customers, simplicity and growth, but we have much more still to do.”

Shares in Vodafone jumped by nearly 4% on Monday morning.