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(Corrects figure in paragraph 4)
* Posts Q4 revenue growth of 0.1 percent
* Forecasts organic core earnings growth
* Shares down after strong run
By Kate Holton
LONDON, May 19 (Reuters) - Britain's Vodafone posteda rise in quarterly sales for the first time in nearly threeyears on Tuesday in the clearest sign yet that Europe's mobilemarket is edging towards recovery.
The world's second largest mobile operator has been hit hardby the constraints on consumer spending in its big Europeanmarkets and by regulator-imposed price cuts. But on Tuesday itfinally forecast 2016 core earnings growth on an organic basisfollowing seven straight years of declines.
The full-year results follow updates from the likes ofTelefonica and Deutsche Telekom which alsoshowed signs of gradual, if slow, improvement.
Vodafone, which has 446 million mobile customers incountries ranging from Albania to Ireland, Qatar, India, SouthAfrica and New Zealand, saw small improvements in Italy, Spainand Portugal while its biggest market Germany remained weakbecause mobile phone bills there fell.
"We have seen increasing signs of stabilisation in manyof our European markets, supported by improvements in ourcommercial execution and very strong demand for data," ChiefExecutive Vittorio Colao said.
Shares in the group slipped 1.6 percent in early trading,pulling back from a 9 percent rise in just over two months asinvestors anticipated better results.
Analysts believe the European mobile market is set tostabilise in 2015 and 2016 and should return to top-line growthafter that, helped by demand for the more expensive fixed-linefibre services and superfast 4G mobile connections.
They believe Vodafone should be well placed to reap therewards after it embarked on a programme to bolster its mobilespeeds and either build or buy superfast fixed-line broadbandnetworks.
"We have significant opportunities ahead of us, with only 13percent of our European mobile customers using 4G, and ourmarket share in fixed services only a fraction of our share inmobile," it said.
Vodafone reported a rise in fourth-quarter organic servicerevenue of 0.1 percent, which followed 10 quarters of declines.It also forecast a range for 2015-16 core earnings of 11.5billion pounds ($18.0 billion) to 12 billion pounds, which wouldindicate core organic earnings growth.
The group said it also intended to grow its dividends pershare annually after a 2 percent rise.
Analysts at Citi said the results and guidance were in linewith forecasts. "We see the positives as probably not quitepositive enough to keep the stock moving up today," they said.
($1 = 0.6387 pounds) (Reporting by Kate Holton; Editing by Paul Sandle and SophieWalker)
