Vodafone revenue up nearly 10 per cent

Solid revenue growth at UK mobile operator

Vodafone results - decent - but industry experts see European problem

Revenue at UK mobile operator Vodafone increased by 9.3 per cent for its most recent financial quarter to £10.7bn.

Vodafone chief executive Vittorio Colao said that its total communications strategy was delivering well, with group data revenue up 19 per cent and fixed line revenue 7 per cent higher than last year's comparative period.

"Free cash flow generation was strong at £1.9 billion, up 21 per cent, and we've reaffirmed guidance for the full year,” added Coloa.

But while Vodafone has shown signs of combating the recession, some areas of weakness remain said Raymond Yu, analyst with market watcher Ovum.

"Taking away the positive effects from foreign exchange fluctuations and acquisitions, Vodafone’s results also highlight several areas in its core businesses that require close attention," said Yu.

Yu specifically pointed to the European arm of Vodafone's business, where it is under pressure.

Vodafone also noted in its financial statement that its future revenues will be impacted by by reduced mobile termination rates in the UK and by lower roaming prices and reduced travel across Europe.

While Vodafone was doing well in attracting customers to its fixed services in Europe, growth in this area is not compensating for the drop in mobile voice revenues.

"[Fixed services] still only contribute 20% of service revenues in Europe," said Yu. "This is a major concern as mobile voice is the ‘bread and butter’ for mobile operators."