In Europe service revenue fell 3.2%, a 1.4 percentage point improvement on the previous quarter. Growth continued in Italy, trends improved in the UK and Germany and trends were stable in Spain. Data and fixed line revenue continued to show a strong performance. In mobile, improvements were driven by enterprise and messaging with voice usage and price trends broadly stable.
In Africa and Central Europe service revenue fell 0.5%, a 3.4 percentage point improvement on the previous quarter driven by a return to service revenue growth in Turkey (+12.9%) and continued robust growth at Vodacom (+5.5%) driven by data.
Asia Pacific and Middle East delivered a 10.4% increase in service revenue; India’s service revenue grew by 13.8% with strong customer growth despite a more competitive environment.
Verizon Wireless delivered another strong result with service revenue growth of 4.7% and a 7.0% pro forma increase in the mobile customer base.
Proportionate mobile customer base reached 333.0 million with 10.3 million net additions during the quarter.
Strong progress on our strategic priorities – data revenue exceeded £1 billion: Group data revenue exceeded £1 billion for the first time, up 17.7% year on year, with increased take up of data-enabled smartphones across Europe where active data users now exceed 30 million. Data as a percentage of service revenue in Europe was 11%, increasing for the sixth consecutive quarter.
Fixed line revenue grew by 10.0% to £862 million in the quarter with strong broadband customer growth; the European broadband customer base now exceeds five million; revenue grew by 4.1% in Germany, 22.3% in Italy and 10.7% in Spain.
Outlook for the 2010 financial year – free cash flow range upgraded: ?Adjusted operating profit is now expected to be in the range of £11.4 billion to £11.8 billion; cost reduction programmes on track; third quarter EBITDA trends in line with management expectations.
Strong free cash flow of £5.8 billion year to date; upgrading free cash flow range by £0.5 billion to between £6.5 billion and £7.0 billion.
Vittorio Colao, chief executive, commented: “Service revenue trends have improved with continuing growth in our data and fixed line revenue. Free cash flow guidance has been raised reflecting the impact of our cost and working capital reduction programmes. We are on track to deliver on our strategic priorities in the current financial year.”