Citing the worsening economic crisis in its southern European markets, Vodafone made a write-down of U.S.$6.3 billion and cut its mid-term sales targets.
Vodafone made the write-downs against its units in Spain, Italy, Greece and Portugal, all nations where the economic crisis is forcing consumers to cut back on their mobile service spending. Although the operator saw European revenue fall by 1.1 percent, Vodafone was able to offset that with an 8 percent increase in Africa, the Middle East and Asia-Pacific regions, and saw its overall revenue rise 1.5 percent on the year. But with sales slumping in Europe, and regulatory and foreign exchange pressures, the operator said it expected to miss its 2013 growth target of 1-4 percent.
Yankee Group Research VP Declan Lonergan comments
"Vodafone's results are not particularly surprising. For the past two to three years, mobile operators in the most economically-challenged European markets have been struggling to achieve top-line growth. The perfect storm of recession, regulation and competition from other operators and over-the-top players is really starting to hurt the incumbent operators. All these companies can do is focus on cost containment and data revenue growth, and hope that's enough to see them through this difficult period."