* Third-quarter organic service revenue rises 0.4%
* Analysts had expected a drop of 0.1-0.2%
* Trading performance underpins confidence in outlook
* Shares up 4.9%
(Recasts, adds further CEO comments, updates shares)
By Paul Sandle
LONDON, Feb 3 (Reuters) - Vodafone boss Nick Read
gave an upbeat assessment of the mobile operator's post-pandemic
prospects on Wednesday, predicting accelerating growth after it
reported an increase in third-quarter revenue.
The world's second-largest mobile operator soundly beat
analyst expectations for organic service revenue growth -
including the likes of monthly access charges, airtime usage and
roaming - in the three months to Dec. 31.
Its 0.4% growth compared with analyst expectations of a
decline between 0.1% and 0.2%.
Shares in the company rose 4.9% to 133.6 pence by 1032 GMT.
Chief Executive Read said there was momentum across the
business, including in its largest market, Germany.
"We are now firmly back into growth and I expect that growth
to accelerate from here," he said on Wednesday.
Vodafone reiterated its guidance for adjusted full-year
earnings of between 14.4 billion euros ($17.3 billion) and 14.6
billion euros, against 14.5 billion the previous year, while
generating free cashflow of at least 5 billion euros.
Vodafone's organic service revenue had fallen 0.4% in the
second quarter and 1.3% in the first quarter as roaming revenue
was hit by the coronavirus-related drop in travel.
Germany produced the biggest quarter-on-quarter improvement
among Vodafone's major European markets, with service revenue up
1%. Broadband customers had upgraded to higher-speed plans
during the pandemic, Vodafone said.
The company's Italian business continued to be squeezed by
fierce competition in the low-value part of the mobile market,
while price competition in Spain was compounded by the
pandemic's impact on roaming and visitor revenue.
A recent report in Spain's El Confidencial said Vodafone was
in talks with rival MasMovil about a potential tie-up.
"I'm not going to comment on long-running speculation," Read
said on Wednesday. "What I would say is I am very pleased with
our performance in Spain."
"I think what you could say is consolidation is probably
needed in Spain."
On Italy, Read said there were encouraging signs on what
could be "a first tentative step to maybe more sustainable
pricing".
Read also said the listing of the group's infrastructure
company Vantage Towers was firmly on track to take place early
this year.
Vodafone has chosen a full bank syndicate for the listing on
the Frankfurt exchange in March, Reuters reported on Tuesday.
($1 = 0.8325 euros)
(Editing by Jane Merriman and David Goodman)
Vodafone (VOD)