Smartphones boost Vodafone Ireland

Irish customers continued to embrace smartphones in the last quarter of 2011, with sales of the devices rising by 50 per cent at Vodafone Ireland.

The Irish division of the telecoms operator said smartphones now represent about two-thirds of all billpay mobile sales.

However, average blended monthly revenue per user was slightly lower, falling to €32.20.

The Irish division added 22,700 customers in the quarter ended December 31st, bringing its total customer base to 2.47 million. Vodafone Ireland currently has 2.24 million mobile customers, and its fixed line and DSL customer base recently reached 232,000.

Video traffic across its fixed customer base rose by 80 per cent in the past 12 months.

Parent company Vodafone Group said service revenue growth slowed in the fiscal third-quarter as consumers in Spain and Italy cut spending amid the European sovereign debt crisis.

Service revenue excluding currency swings and acquisitions in the three months through December gained 0.9 per cent, after rising 1.3 per cent in the prior quarter, the company said today. Analysts had estimated growth of 1.1 per cent, according to a Bloomberg survey.

Service sales include voice, data, messaging and broadband services. They exclude handsets and accessories.

"Despite the further deterioration of the southern European economic environment during the quarter, our broad geographic mix is delivering a resilient overall performance," chief executive Vittorio Colao said in the statement.

Vodafone has sought to drive data sales from smartphones including Apple's iPhone and handsets running Google's Android software to counter declining European service revenue. In Spain, Vodafone has cut prices in the country, as it contends with the highest unemployment rate in Europe.

Vodafone in November 2010 said service revenue will grow in the range of 1 per cent to 4 per cent in the next three years.

Mr Colao, a former McKinsey and Co partner who became Vodafone chief executive in 2008, said in November he will start a new push tocut costs to cushion the impact of Europe's economic slowdown.

The Vodafone Group this week abandoned an attempt to merge its Greek unit with rival Wind Hellas after facing European Union regulatory opposition. A successful merger would have allowed Vodafone to reduce costs and better compete in the country with Hellenic Telecommunications Organisation SA, or OTE, which is controlled by Deutsche Telekom.

Vodafone in November booked an impairment loss of £450 million (€539 million) for its business in Greece, citing lower cash flow and an increase in discount rates. In the year-earlier period, Vodafone had already lowered the value of its Greek operations by £800 million.

Additional reporting: Bloomberg