Vodafone boss welcomes EU block on Hutchison-O2 merger

17th May 2016, Comments 0 comments

The boss of British telecoms giant Vodafone on Tuesday welcomed the European Union's decision to prevent rival Telefonica's blockbuster sale of O2 to Hong Kong group Hutchison.

Alongside the release of mixed earnings by Vodafone, chief executive Vittorio Colao said that while he welcomed consolidation in the sector, "it should not come at the cost of lower competition".

The European Commission last week blocked a £10.25-billion ($15.2-billion, 14.0-billion-euro) deal that would have created Britain's biggest mobile phone company, citing "significant competition concerns".

Colao on Tuesday added that while he still saw further consolidation, "it's very hard to see who with whom".

It comes after telecoms and television broadcasting firm BT Group snapped up mobile operator EE last year in a deal that completed in January.

Vodafone meanwhile posted its first annual rise in operating profits in eight years, boosted by growth in Europe and emerging markets.

Earnings before interest, tax, depreciation and amortisation (EBITDA) grew 2.7 percent to £11.6 billion in the year to March, Vodafone said in a results statement Tuesday.

That was broadly in line with expectations of £11.7 billion, according to analysts polled by Bloomberg.

Revenue on an organic basis, which strips out the impact of takeover activity and currency fluctuations, rose 2.3 percent to almost £41 billion.

The upbeat figures sent the company's share price rising 1.5 percent to close at 227 pence on London's benchmark FTSE 100 index, which finished 0.3-percent higher.

Vodafone however faced a net loss of almost £4.0 billion last year, owing to a large accounting charge linked to the tax treatment of a revaluation of assets in Luxembourg.

That contrasted with profit after tax of nearly £5.8 billion in the previous financial year.

"This has been a year of strong execution for the group, returning to organic growth in both revenue and EBITDA for the first time since 2008," Colao said in the earnings release.

Growth was aided by its operations in Europe, as well as Africa, Middle East and Asia Pacific (AMAP), while its performance was buoyed also by cost-cutting.

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© 2016 AFP

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