Vodafone's revenue remained flat in the fiscal year to March 31, with sales in Europe shrinking in the face of intense competition and challenging economic conditions.
The mobile telecommunications operator reported revenue for its fiscal year of £38.3 billion. Net profit shot up to a massive £59.4 billion from £657 million a year earlier. However, the boost was almost entirely due to the sale during the year of Vodafone's 45% stake in US operator Verizon Wireless for $130 billion. The company also reported a net profit on its continuing operations of £11.3 billion, which came mostly from tax credits.
The sale of the Verizon Wireless stake leaves Vodafone more dependent on its European holdings, where performance remains poor. Adjusted operating profit (excluding restructuring costs and amortisation) fell in every European territory for which Vodafone breaks out results and dropped across the continent to £2.7 billion from £4.2 billion a year earlier.
Vodafone's recipe for improving its fortunes relies on growth prospects in data, emerging markets, unified communications and converged services, it said. In Europe, acquisitions of Germany's largest cable operator, Kabel Deutschland, and of Spanish cable operator Ono will let Vodafone offer mobile and fixed broadband, and TV services.
European smartphone penetration grew by 7 percentage points year on year to 45%, and early experience from 4G shows that customers use roughly twice as much data compared to 3G data usage, Vodafone said.