LONDON, July 19 (Reuters) - Vodafone posted an asexpected first-quarter 3.5 percent drop in its key organicservice revenue as increasing competition in Germany and Italywiped out improvements in India at the world's second largestmobile operator.
Vodafone, which has been battling increasing regulation,recession and competition across Europe in the last year, saidon Friday organic service revenue was down 5.1 percent inGermany, its biggest European market.
Service revenue in Britain was down 4.5 percent while Spainwas down 10.6 percent and Italy down 17.6 percent, as customerssought to save money by making fewer calls and retaining olderhandsets, and as rivals stepped up competition.
"Although regulation, competitive pressures and weakeconomies, particularly in Southern Europe, continue to restrictrevenue growth, we continue to lay strong foundations for thelonger term," Chief Executive Vittorio Colao said in astatement.
The British firm reiterated its full-year outlook and saidgroup overall revenue in the three months to the end of June was11 billion pounds ($16.7 billion), in line with consensus.