Vodafone revenue declined 3.6%
The results includes a 2.1 percentage point impact from adverse foreign exchange movements and a 2.8 percentage point positive impact from M&A and other activity.
On an organic basis, Group service revenue decreased 4.8% or 2.4% excluding the impact of mobile termination rate (MTR) cuts.
In Europe organic service revenue fell 9.6% in the quarter, or 7.0% excluding the impact of MTR cuts. Performance across the region remained under pressure mainly due to continued price competition. In Germany service revenue declined 7.9%, reflecting strong price competition in both consumer and enterprise. However, increased customer investment in the quarter resulted in improved customer additions.
UK service revenue declined 5.1% due to price competition, particularly in prepaid and enterprise. Good progress has been made on 4G, with more than 370,000 customers on 4G plans since launch in August. In Italy, service revenue declined 16.6% driven by further macroeconomic weakness and aggressive price competition.
Price competition in the prepaid market became less intense following the conclusion of the summer promotional period. Spanish service revenue fell 14.1%, an improvement from the previous quarter, driven by increased contract and fixed broadband net additions, supported by our convergent offer.
Organic service revenue in AMAP grew 5.5% in the quarter, with continued strong revenue growth across the majority of our markets. In India service revenue grew 13.2% driven by a higher customer base, improved voice pricing and strong data growth. Mobile internet users in India increased 38% in the quarter to 45.7 million and data usage continues to grow strongly with 3G usage now averaging in excess of 700MB per month.
Vodacom Group service revenue grew 3.5%, with South African service revenue growth improving to 0.6% following a successful summer campaign. Service revenue in the Vodacom International businesses grew 15.1%. Vodafone Turkey continued to grow strongly at 3.9% or 11.0% excluding voice and SMS MTR cuts.
Company's joint venture in Australia reported a service revenue decline of 8%. However, network performance and customer satisfaction have improved strongly in recent months. In Egypt service revenue grew 1.1%, improving from the previous quarter's 0.8% decline, as customer usage trends improved following the removal of the curfews.
Free cash flow of 1.0 billion pounds in the quarter was 0.2 billion pounds lower year-on-year due principally to increased capital expenditure. ■