European carrier Vodafone recently posted their first quarter of positive growth in Europe since 2010. While their status is still far from dominant, they are beginning to see recovery in both growth and profits, even in the face of local incumbents like Deutsche Telekom in Germany. In the midst of this mass return to form sweeping across their service areas in Europe, Vodafone has seen their first growth in overall revenue and earnings since 2008. A recovery like this is an incredible moment for any carrier, let alone one of Vodafone's scale.
According to Vodafone, their recovery has mainly been due to network buildout and improvements. A slew of new spending on larger, faster and stronger networks has given them higher demand in a wider area than they've seen in quite some time. The network spending has amounted to roughly $27.51 billion as part of Project Spring, a network rejuvenation project that has seen over 87 percent of Vodafone's European markets get 4G LTE speeds and many outlying and emerging areas of their markets, such as India, being brought up to passable 3G speeds for modern applications in the mobile space. A total gross earnings posting of 11.6 billion pounds for the 2015 fiscal year stands as the biggest indicator of their return to success; that amount is up roughly 2.7 percent year over year from 2014, and is projected to go up to 3.6 percent growth for the 2016 fiscal year. This growth resulted in Vodafone shares experiencing a 2.4 percent growth.
While the capital expenditure involved in Project Spring was significant, analysts with Citi projected that the spending won't put enough of a damper on Vodafone's free cash flow to cause much worry. After facing billing issues in their homeland and a long period of lagging growth throughout all of their markets, especially in Europe, this return to form may well signal a new sunrise for Vodafone, though it's far too early to tell at this point. This growth, along with the projected increase in liquid assets for the future and the recent blocking of a merger between UK carriers O2 and Three, should help Vodafone to hang onto its third place position in the UK, one of its biggest markets, though breaking into second place in the near future is unlikely.