In addition, Vodafone said it expects intense competitive pressure in India in the fourth quarter and is taking a series of commercial actions, including the extension of 4G services to 17 circles. The London-headquartered telecom giant also reported a decrease in revenues in its home market of the United Kingdom, also as a result of price competition.
"In the United Kingdom we have made good progress in improving customer service but face heightened price competition in enterprise", said Vittorio Colao, Vodafone's CEO, in a statement.
Vodafone warns of a hard year, amid slow third and fourth quarter revenue results. The company is in discussions to merge its Indian unit, the country's No. 2 carrier, with the third-largest operator, Aditya Birla Group's Idea Cellular Ltd, to fend off Ambani's Reliance Jio Infocomm Ltd.
In its latest trading update, the FTSE 100-listed group reported a 1.7% increase in overall organic service revenue for its third quarter. Vodafone previous year wrote down the value of the Indian business by more than $5 billion. (Mumbai: BHARTIARTL) as market leader and rank as one of the world's largest service providers.
Overall, revenue in the past three months dropped by 3.9% to €13.7 billion.
Group-wide organic service revenue grew by 1.7% to €12.3bn, although total revenue declined by 3.9%, largely due to negative impacts from foreign exchange rate movements. "We will recover from headwinds in India", Colao said.
Data browsing revenue growth slowed from 16 percent in Q2 to 0.6 percent in Q3 due to the impact of free services from the new entrant. And while a United Kingdom recession has not yet materialized, economists have expressed concern about the outlook for United Kingdom businesses if costs rise and spending is squeezed.
"Mobile contract average revenue per user [Arpu] continued to stabilise, reflecting the successful adoption of our "more-for-more" propositions, while we remain Europe's fastest-growing broadband company, illustrating our effective convergence strategy", he said.
This weaker performance overshadowed a stronger performance elsewhere, as it saw organic service revenue up 4.0% in its South African business Vodacom in the quarter, and 10.5% in its other markets in the region, helped by a strong performance in Turkey and Egypt.
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