Vodafone sees share of revenue from data services rise

Vodafone Group PLC, the world's largest mobile phone operator, reported on Monday a third-quarter increase of 4.9 million customers, bringing the group's total customer base to 112.5 million.

Revenue from data services, including text messaging, in the quarter ending Dec. 31 accounted for 16 percent of total service revenue, compared to 12.7 percent for the same period the year before, Vodafone said in a statement.

The rise in data revenue, however, is not attributed to Vodafone's Live! MMS (Multimedia Messaging Service), which was launched on Oct. 24 and attracted over 380,000 customers by the end of the year.

Rather, revenue from the group's SMS (Short Message Service) continued to grow, with demand particularly strong around the December holiday season, according to Vodafone spokesman Bobby Leach. "The new year is traditionally the highest point in the year for text messaging," Leach said.

Whether MMS will help increase Vodafone's ARPU (average revenue per user) for data services in the long run remains to be seen, said Richard Clifford, an analyst with the market research firm Datamonitor PLC in London. "I think MMS will remain a niche service targeting certain groups and not evolve into a mainstream service like SMS," Clifford said. "There are still to many issues, like interoperability between handsets and carriers, that have to be resolved."

ARPU increased in all Vodafone's key European markets over the past 12 months, the company said. ARPU is calculated as total revenue excluding handset revenue and connection fees, divided by the weighted average number of customers during the period. It serves as a barometer of service demand.

In Germany, for instance, total ARPU for 2002 rose to €312 (US$338), compared to €303 for 2001, according to Vodafone. Text messaging accounted for 18.4 percent of December's ARPU and Internet data 0.8 percent.

In the U.K., by comparison, Vodafone increased ARPU for the same 12-month period to £287 (US$469) from £278 the year before. Text messaging in December accounted for 15.2 percent of that month's ARPU and Internet data 0.8 percent.

Vodafone doesn't plan to provide an ARPU figure specifically for MMS, Leach said.

As for the increase in new customers in the third quarter, Germany contributed 922,000, Italy 529,000 and the U.K. 267,000, Vodafone said.

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