Vodafone Group’s service revenue tops analysts’ estimates on growth in India

Vodafone Group Plc, which is currently the second-largest mobile-phone carrier, announced a smaller decrease in its service revenue than the initially expected one.

Vodafone made an official announcement today, revealing that its service revenue, excluding currency swings and acquisitions, decreased by 4.8% and reached 9.8 billion pounds (16 billion dollars) in its third quarter that ended in December 2013. According to the average of estimates compiled by Bloomberg, analysts forecasts had called for a 4.9% drop.

Vittorio Colao, who is the Chief Executive Officer of Vodafone, said he is betting on the companys growth in Asia and Africa to compensate for the price wars in Europe. Currently, India is Vodafones biggest market by customers. Data use there more than doubled, because more people started using their phones for access to the Internet. The companys revenue in India increased 13% and reached 937 million pounds. Vodafones total revenue decreased 4.3% to 11 billion pounds for the quarter, excluding the effect of deals and currency value changes.

“India is becoming one of our top four companies,” Colao said today. “It will be very quickly one of our top two. We of course would be very keen to enhance the value of the Indian market.”

Vodafone Group Plc also announced that its European service revenue dropped 9.6% due to price competition. The companys biggest market by revenue, Germany, reported a 7.9% decrease, because the companys competitors cut prices for both regular and business customers. Vodafones U.K. service revenue fell by 5.1%.

In its statement, the company announced an improvement in customer additions. Chief Executive Officer Colao reminded that the company began launching 4G in the U.K. in 2013 and now has about 2 million customers for its 4G service.

Simon Weeden, an analyst at Citigroup Inc., said in a note to investors, cited by Bloomberg: “The CEO’s narrative adopts a somewhat more upbeat tone than recent statements. Operationally, the worst may be over.”

Vodafone Group Plc rose by 3.01% to GBP 222.40 in London by 13:42 GMT. The 20 analysts offering 12-month price targets for Financial Times have a median target of 242.50, with a high estimate of 275.00 and a low estimate of 130.00.