As the financial forecast in Europe worsens, the aftershocks of the recession are beginning to strike at UK-based phone operator Vodafone, who has reported a sharp drop in European revenue gained from calls, texts and data usage.
Currently the biggest telecommunications operator in the world related to revenue, Vodafone posted financial results that did not meet expectations on Friday. The company posted a 7.7 percent fall in revenue to billion 10.77 billion pounds ($16.90 billion) for the three months ending June 30, missing market predictions of £10.88 billion.
Turnover generated from calls, texts and data usage fell 1.6 percent in the three months leading to the end of June.
The company blamed the decrease in revenue on the volatile economic climate in Europe, where approximately 75 percent of its revenue streams come from. In particular, the financial woes of Italy, Spain, Greece and Portugal were highlighted.
Vodafone also said that revenue has been hit by regulations tightening the fees operators are able to charge customers for making calls outside their networks, and fewer UK holidaymakers and businesses were going abroad and therefore were liable for roaming fees.
Revenues from services -- excluding exchanges and acquisitions -- missed market expectations for a 0.8 percent increase, and instead rose 0.6 percent.
Chief Executive Vittorio Colao said:
"Despite the difficult market conditions, particularly in southern Europe, we continue to make progress in the key areas of data, enterprise and emerging markets, while maintaining tight control of our cost base. Vodafone remains focused on driving through significant improvements to our customers' experience through our ongoing investment in our networks, stores and IT platforms."
Earlier this year, Vodafone announced a £4 billion pounds ($6.3 billion) writedown on the value of assets related to its businesses in the counties now giving it the most worry -- Italy, Spain, Portugal and Greece.
The operator has warned that the grim outlook is likely to remain unchanged for the rest of the year. Vodafone employs 84,000 people worldwide. Its first half financial results will be released on Nov. 13.