European malaise and fixed-line declines are likely to weigh on half-year results from Vodafone (VOD), due on 11 November. The mobile operator’s first-quarter service revenues were down more than 4 per cent as Spain and Italy posted 15 and 16 per cent declines respectively.
Investors may have cause to fear higher costs and tighter margins, too, after Vodafone bought Spanish fixed-line cable group Ono for €7.2bn (£5.6bn) and laid out plans to make £19bn in network investments over the next two years. On the bright side, sales growth should remain strong in markets such as India and Turkey. Vodafone has also announced a deal with British Sky Broadcasting (BSY) to offer its NowTV service to its mobile customers, which could encourage them to pay a higher tariff for faster downloads.
Broker Espirito Santo forecasts pre-tax profits of £305m, giving EPS of 5.5p.
