Vodafone back to growth

Mobile data appears to be fuelling the recovery for the network operators, as Vodafone announced a 1.1 per cent growth in its services revenues to 10.6 billion. This is the first sign of growth from the company for 18 months.

In the quarter to June 2010, Vodafone's European data revenue growth came in at 1.2 billion, a rise of 23.3 per cent, as a result of its sales of smartphones and notebook connectivity USB sticks.

The company started selling Apple iPhones earlier this year to complement its range of phones from competitors such as HTC, Blackberry and Nokia.

In revenue terms, Vodafone is the biggest international operator but only the third largest in the UK. The company is seeking to expand its market in China but it is cutting back on its European spend.

The company is hoping to save 2 billion by 2012 and an initial phase saw the cutting of 2,300 jobs across Europe. It is also hoping to reduce costs by centralising its IT infrastructure.

In the report, Vodafone chief executive officer Vittorio Colao wrote, "These are the first quarterly results to show organic service revenue growth since the global recession first impacted Vodafone and reflect our increased commercial focus across the Group."

Vodafone's ongoing dispute with the UK tax authorities has been brought to a halt.

When the company acquired Mannesmann, a large German mobile operator in 2000, it decided to register it in Luxembourg. HM Revenue & Customs claimed that, under the Controlled Foreign Companies rules, Vodafone would still be taxed. It has now agreed to pay 1.25 billion to settle the case.

This should not negatively affect Vodafones cost-cutting initiative as it had previously made provision for 3.1 billion to cover tax liabilities arising from Mannesmann's arrangements.