Vodafone reported strong FY26 preliminary results with total revenue increasing 8 percent to €40.5 billion, supported by solid growth in Africa, digital services expansion, operational efficiencies, and strategic telecom consolidation in the UK market.
The telecom operator posted service revenue growth of 8.8 percent to €33.5 billion compared with €30.8 billion in FY25, while adjusted EBITDAaL increased 3.8 percent to €11.4 billion from €10.9 billion a year earlier.
Vodafone’s operating profit recovered sharply to €2.8 billion, improving by €3.2 billion from a loss of €0.4 billion in FY25. Adjusted free cash flow reached an inflow of €2.6 billion as the company accelerated efficiency measures and monetized strategic assets.
The group achieved organic service revenue growth of 5.4 percent and organic adjusted EBITDAaL growth of 4.5 percent during FY26. Vodafone said it remains focused on delivering double-digit organic growth in adjusted free cash flow over the medium term.
“Our strategy is focused on continuing to deliver operational progress across our priorities of Customers, Simplicity and Growth. This will drive improved performance and provide us with strong foundations for future growth,” Vodafone Group CEO Margherita Della Valle said.
Germany, Vodafone’s largest market, reported a marginal 0.2 percent decline in organic service revenue for the full year. However, the business returned to growth in the fourth quarter with 1.3 percent growth, supported by improvements in consumer broadband ARPU and customer engagement.
In the UK, Vodafone completed a major transformation through the merger with Three UK and the £4.3 billion buyout of CKHGT, making Vodafone the sole owner of the UK’s largest mobile network. The combined Vodafone Three business now serves more than 28 million mobile customers.
The integration of spectrum assets delivered major network improvements, with Vodafone stating that 4G speeds improved by up to 40 percent for around seven million Three and SMARTY customers.
Africa remained Vodafone’s strongest growth engine, delivering double-digit organic service revenue growth of 12.9 percent. Through Vodacom, Vodafone continued expanding broadband and fiber infrastructure across the continent.
Vodacom strengthened its fixed broadband business through the completion of a fibre joint venture with Maziv in South Africa during December 2025. The company is also targeting broadband leadership using FTTH, fixed wireless access (FWA), and satellite connectivity technologies.
Vodafone Business delivered 3.2 percent organic service revenue growth, supported by double-digit expansion in digital services. The company is positioning its enterprise portfolio around AI-driven connectivity, sovereign digital infrastructure, 5G standalone networks, GenAI services for SMEs, and satellite-based IoT connectivity.
Türkiye also delivered strong performance with service revenue growth of 10.8 percent in euro terms.
Vodafone said its strategic priorities remain centered on customers, simplicity, and growth. The company highlighted that its digital services and next-generation connectivity platforms are becoming increasingly important enablers of artificial intelligence adoption, enterprise digitalization, and secure data infrastructure.
As part of its operational transformation strategy, Vodafone is targeting €2 billion in gross efficiency gains and synergy potential through network integration, digitalization, automation, and AI-led operational improvements.
Capex
Vodafone increased total capital additions to €7.291 billion in FY26 from €6.862 billion in FY25 as the telecom operator accelerated investments in network expansion, broadband infrastructure, spectrum, and strategic acquisitions across key markets.
The company maintained a capital intensity level of 18 percent during FY26 and said its medium-term strategy is to keep capital intensity broadly stable across markets while ensuring continued investment in network quality, digital infrastructure, and growth opportunities.
Integration-related capital additions rose sharply to €209 million in FY26 compared with €31 million in FY25, reflecting increased spending linked to the integration of Vodafone UK and Three UK operations.
Germany remained Vodafone’s largest investment market with capital additions of €2.496 billion in FY26, slightly higher than €2.482 billion in FY25. The UK recorded one of the strongest increases in investment spending, with capital additions rising to €1.388 billion from €897 million a year earlier due to network integration and expansion activities related to Vodafone Three.
Africa capital additions increased to €1.185 billion from €1.038 billion, reflecting continued investment in broadband, fiber, mobile infrastructure, and digital connectivity services across the continent. Other Europe reported capital additions of €860 million compared with €856 million in FY25.
Türkiye also increased infrastructure spending with capital additions reaching €539 million, up from €447 million in the previous year. Meanwhile, spending under common functions declined to €823 million from €1.142 billion.
Vodafone said the merger of Vodafone UK and Three UK is expected to generate approximately £700 million in annual cost and capital expenditure synergies by FY30. The company also announced a £4.3 billion (€4.9 billion) agreement to buy out CK Hutchison Group Telecom Holding Limited (CKHGT), enabling Vodafone to become the sole owner of Vodafone Three.
In Africa, Vodacom agreed to acquire an effective 20 percent stake in Safaricom for a combined cash consideration of €1.81 billion, strengthening Vodafone’s strategic position in African telecom and digital services markets.
Vodafone also completed the acquisition of Telekom Romania Mobile Communications for €30 million on October 1, 2025, expanding its presence in Eastern Europe.
In South Africa, Vodafone strengthened its fixed broadband growth strategy by completing a fibre joint venture with Maziv on December 2, 2025.
The telecom operator reported cash outflows of €404 million for licenses and spectrum acquisitions during FY26 as it continued investing in mobile network capacity, 5G services, and future connectivity infrastructure.
BABURAJAN KIZHAKEDATH
