Vodafone returns to growth but says sorry for UK billing problems

Vodafone chief Vittorio Colao cheered investors as the mobile giant returned to growth for the first time since 2008 but also apologised to UK customers for continuing problems with billing.

Shares in Vodafone rose 4.35p, or 2%, to 228p after Colao pledged it would carry on raising its dividend, which went up 2% to 11.45p a share last year.

But he also admitted that the problems with billing in the UK, where Vodafone has 19.5 million customers, would not be sorted out until the end of the summer.

He said: “I am very sorry for our customers in the UK and for the company over the billing problems that came after we did a major IT migration. We have put an extra 600 people into our call centres and we should be back to normality by the end of the summer and back to full commercial strength by the end of the year.”

Across the broader group, Vodafone’s revenues rose by 2.3% to £41 billion and operating profits by 2.7% to £11.6 billion. Colao said this reflected the £19 billion investment the group had made under its so-called Project Spring, launched three years ago. This has seen huge spending on broadband in Germany and Italy in particular and emphasis on mobile data and 4G services.

Colao said: “Where prices are starting to come down for mobile data, 4G customers are spending more.” That was highlighted by a 66% rise in mobile data usage in the second half of the year to March. But only 27% of its European customer base has 4G so far, leaving plenty of room for growth.

From now on it will report its results and pay its dividend in euros, reflecting the shape of the business more accurately.

Vodafone said it now expects earnings growth of 3%-6% this year and higher capital spending as it continues to improve its networks.