Vodafone Boosts Outlook as Data-Hungry Users Ditch Wi-Fi

Vodafone reaped a payoff from its network build-out in Europe, taking the rare step of raising its profit forecast as customers choose costlier data plans, according to Bloomberg.

The shares rose after the carrier almost doubled its outlook for earnings growth and reported second-quarter results that beat expectations on strength in most markets. Vodafone is benefiting as consumers opt for its mobile networks instead of Wi-Fi, from expansions in its fixed broadband and enterprise businesses as well as cost cuts.

Vodafone now expects earnings before interest, taxes, depreciation and amortization to increase about 10 percent in its fiscal 2018 year, from 4 percent to 8 percent previously, the company said in a statement. The stock jumped as much as 5.3 percent, the most since May 2015.

Shareholders have been seeking better prospects in Europe, where the carrier generates more than 70 percent of its revenue, and progress in India, where Vodafone is overhauling its money-losing business. At home in the U.K., they are introducing more flexible wireless packages to win new subscribers and is backing a fiber broadband roll-out to compete with BT’s Openreach network and Liberty Global’s Virgin Media.

Organic service revenue expanded 1.3 percent in the period ended Sept. 30, as a turnaround taking hold in the U.K. and gains across Europe helped offset the end of retail roaming charges. First-half Ebitda of 7.39 billion euros beat analysts’ estimates for 7.09 billion euros.

Vodafone said that while competition remains intense in India, there are signs of positive developments, including the consolidation of smaller operators and recent price increases from the new entrant, Reliance Jio Infocomm. Service revenues from India business were down 15.8 percent in the first half and adjusted Ebitda fell 39.2 percent.