(Bloomberg) -- Vodafone Group Plc’s Chief Executive Officer Margherita Della Valle said she expects to see an acceleration of service revenue growth in Germany, the telecommunications company’s largest market, after the company lost customers when it rolled out higher prices. 

Overall organic service revenue rose 4.7% to €9.38 billion ($10.1 billion) in third fiscal quarter that ended in December, Vodafone reported on Monday. That beat the 4.3% average estimate by analysts in a Bloomberg survey.

In Germany, that revenue metric grew 0.3%, in line with analysts’ estimates and slower than a quarter before when organic service sales grew about 1.1%. The company said growth was checked by customer losses for its broadband plans, where it raised prices. While mobile service revenue also declined, the company added a net of 95,000 customers. 

“We put this term firmly behind us, which means that what we are going to look forward to in the coming quarters is continued acceleration of our underlying growth rates in Germany,” Della Valle said. While price increases “are never welcome,” she said “it’s been as well received as we could possibly have hoped for.” 

Vodafone shares fell 0.7% to 68.15 pence at 10:49 a.m. on Monday. The stock has declined 25% in the last 12 months.

Service revenue growth from Vodafone Business grew 5% from a year ago to €2.62 billion, the company said, after the company won new projects and customers. Contract wins included a contract to provide connectivity to the UK’s smart meter network and to offer 5G services to SNAM, an Italian natural gas transportation company. 

Vodafone is seeking to sell assets in a number of struggling European markets as part of Della Valle’s turnaround strategy. It rejected a bid to combine its Italian business with rival Iliad SA last week, though regulators cleared the sale of its Spanish unit to Zegona. Vodafone didn’t give an update on its Italian talks in Monday’s statement beyond saying that it is exploring options for in-market consolidation.

What Bloomberg Intelligence Says:

Vodafone’s 4.7% organic service revenue-growth beat of 4.3% consensus helped management reiterate full-year targets, with Turkey (4% of sales) a key driver, but a high currency risk. Acceleration in Business (27% of sales) led its 3Q beat, but a turnaround in Vodafone’s key market Germany looks slow with limited improvement in broadband net losses and no change in the expected drag from TV regulation.

— Erhan Gurses, BI telecoms analyst

The UK antitrust watchdog announced an investigation last month into the company’s plan to combine with CK Hutchison Holdings Ltd.’s Three in a move that would create the country’s largest mobile operator. Vodafone said on Monday that it expects the deal to close around the end of calendar 2024. 

(Updates with CEO comments from first paragraph. A previous version of this story corrected the spelling of the CEO’s name)

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