In its latest report on the global telecoms market, Ovum warns that as long as the economic headaches persist in Southern Europe - and with concerns mounting in the UK too – “the road ahead will be uncertain for Vodafone and other Europe-centric telcos.”
According to senior analyst, telco strategy at Ovum, Emeka Obiodu, the significant point from the results reported by Ovum is that “emerging markets are no longer sufficiently rescuing poor performances from Vodafone’s European markets.”
“Although a poor result was expected from the deteriorating economic conditions in Europe in the quarter, it still makes uncomfortable reading to see ‘reported’ revenue declines of 7.7% for the group. There is a caveat though - considering that revenues actually grew organically by 1%, the strength of the British pound has played its role in making this result seem worse,” Obiodu says.
The Vodafone Group reported Australian revenues down 15.2 percent on the corresponding quarter in 2011, and doesn’t expect to see “significant recovery” in the Australian market for at least12 months.
In its report Ovum says that, ironically, the main shining star in Vodafone’s global results is Verizon Wireless and it makes the point that, if Vodafone’s management had capitulated to shareholder pressure few years ago to sell the stake, the Vodafone group’s results would have even being more worrying.
“Vodafone is not alone in noting the impact of competition, further regulator-mandated price cuts and the poor economy for Europe’s telcos. Unfortunately, these dynamics are not going to change soon and the industry will have to work a lot harder to stabilise its performance while unlocking additional value in their business,” Obiodu stresses.