Vodafone posts higher than expected third-quarter sales

Reiterates guidance for the full year

A steady recovery in Europe helped Vodafone stem the rate of sales decline in its third quarter, putting the world's second-biggest mobile operator in touching distance of overall revenue growth once again.

The British company said on Thursday its main organic service revenue measurement, which strips out items like handset sales and currency movements, fell 0.4% in the three months to the end of December, helped by a return to growth in its home market.

The rate of overall decline marked an improvement on the 1.5% fall in the second quarter and a forecast drop of 0.7%.

The group had recorded falls in the main revenue measurement of between 4 and 5% in the last six quarters, as consumers in Europe cut back on using their phones and regulatory changes forced operators to cut their fees.

It reiterated its guidance for the full year.

"We have achieved another quarter of improving revenue trends in most of our major markets," Chief Executive Vittorio Colao said.

Facing tough conditions in Europe and slowing growth in its emerging markets, Vodafone has embarked on a programme to either build or buy superfast fixed-line broadband networks, to enable it to compete with rivals offering mobile contracts alongside television, broadband or fixed-line deals.

It said fourth-generation mobile networks, or 4G, was now available in 18 markets, with 13.7 million 4G customers across the group.