Quarterly sales growth accelerates at Vodafone

Q1 organic service revenue grows 0.8%, up from 0.1% in the previous quarter

Vodafone reported an acceleration in its main quarterly sales growth on Friday as a cable TV acquisition in its biggest market Germany helped to lift sales and consolidate an overall return to growth for the British firm.

The world's second-largest mobile operator, which reported a return to quarterly sales growth for the first time in nearly three years in May, has been hit hard by the constraints on consumer spending in its big European markets, fierce competition in India and by regulator-imposed price cuts around the world.

On Friday it said first-quarter organic service revenue grew 0.8%, ahead of the 0.1% it recorded in the previous three months. That was slightly ahead of forecasts, with analysts expecting growth of around 0.5%.

"Our emerging markets have maintained their strong momentum and more of our European businesses are returning to growth, as customer demand for 4G and data takes off," Chief Executive Vittorio Colao said.

Vodafone said organic sales in Germany, where Vodafone is battling against the incumbent Deutsche Telekom , were down 1.2%, compared with the 3.5% fall in Q4, but that was helped by the inclusion of its Kabel Deutschland TV business.

Vodafone's British market also returned to growth while Italy also showed signs of stabilising.

The improvement in trading helped the group to reiterate its outlook for the full year.