Vodafone reported a robust growth in sales for the third quarter due to strong performance in the UK, Indian and Turkish markets.
The company hopes to close the year towards the upper range of its adjusted operating profit forecast range of £11.8 billion to £12.2 billion, the UK based operator said in a statement on Thursday.
Vodafone however, clarified that the operating profit figures did not include Apple iPhone sales at Verizon Wireless, the US based mobile operator in which it owns 45 percent stake.
Verizon will start selling iPhone in the US market from February 10 and in an attempt to lure customers, it will subsidise the handsets so that they cost significantly lower than their wholesale price.
Verizon plans to recoup the costs by entering into contracts with iPhone customers. The company estimates that its revenue will get a solid boost through the strategy.
However, analysts at Citi believe that Vodafone’s profit will be towards the lower range of its target if it fails to sign up less than 2.5 million by 31 March.
For the quarter ended in December, Vodafone’s group revenue was reported at £11.9 billion, a growth of 3 percent over same period, last year. The group was “executing effectively against our strategy”, said chief executive Vittorio Colao.
Compared to the previous quarter’s growth of 0.1 percent, Vodafone’s European service revenue – excluding handset sales, grew by 0.2 percent in the December quarter; beating analyst’s forecast of 0.1 percent growth.
Vodafone has fought back over the last one year to reclaim it lost turf in the UK market to rivals led by Telefonica’s O2.
Another star performer in the European market has been Turkey, where underlying sales grew by 31.7 percent in the third quarter of 2010.
Among emerging markets, its revenue grew by 16.7 percent in India, as falling tariffs were more than compensated for new customer acquisitions.
The Indian operations may cost the company an additional $1 billion as the government plans to impose retrospective radio spectrum fees for all operators in the country. “It would be really wrong to punish those who have invested”, said Mr. Colao, urging Indian authorities not to go ahead with the plan.