When one of the world's largest and most diverse mobile service providers reports earnings, every wireless investor should take note. And when that same company -- U.K.-based Vodafone
After five years as CEO, Arun Sarin will retire and hand the reins to Vittorio Colao, who has acted as deputy CEO since October 2006. But unlike events that have caused top-job shakeups at the likes of Motorola
Unlike some peers, Vodafone continues to demonstrate that its operational strategy is paying off. The group reported revenue of $70.3 billion for the year ended March 31, up 14.1% from the previous year. Even factoring out recent acquisitions in regions such as India and Turkey, the group grew revenue by 4.1% organically. Free cash flow remains strong at $10.9 billion, supporting an 11% increase in the company's dividend payout.
Vodafone's growth is underpinned by an expanding proportional customer base that is now at 260 million, up 26% from last year. Many of the new customers are coming from emerging markets, a key part of Vodafone's strategy to expand. But Verizon Wireless continues to be a strong contributor to the group as well, and management reiterated its commitment to its U.S. partnership with Verizon Communications
And as with most wireless carriers, service revenue continues to increase compared to voice revenue. The portion of service revenue derived from messaging and data now makes up around 19% of service revenue.
That figure should continue upward, as the company also recently announced it will be selling the Apple
So don't let the CEO's exit fool you. This company has operations humming along just fine. If anything, changing leaders when the outlook is strong makes more sense than the alternative.
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