By Daniel Hunter

The ongoing eurozone problems have hit Vodafone's profits, after the firm reported modest revenue growth after sales in Spain and Italy were hit by the economic problems in the countries.

“We are continuing to make progress in the key strategic areas of data, enterprise and emerging markets," Vittorio Colao, Chief Executive, commented.

"Despite the further deterioration of the southern European economic environment during the quarter, our broad geographic mix is delivering a resilient overall performance.

"Our improved value perception, strong cash generation and healthy balance sheet give us confidence that we can continue to execute well.”

Key findings:

- Group service revenue growth +0.9%; or +3.1% excluding mobile termination rate cuts

- Strong service revenue growth in India +20.0%, Vodacom +8.0% and Turkey +23.5%; continued progress in Germany +0.7% and the UK +1.1%

- Economic conditions in southern Europe showing further deterioration: greater service revenue decline in Italy, -4.9%; fall in Spain broadly stable at -8.8% benefiting from our commercial actions.

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