Vodafone’s European revenue growth improved by 1.4 percentage points in the December 2009 quarter to reach -3.2%, the first improvement since the start of the economic slowdown in 2008

While data revenue is growing fast in absolute terms, its contribution to growth is flat to slightly down, with the main driver being more traditional services improving due to the recovery in year-on-year GDP growth

We expect revenue growth to continue to improve as economic comparables improve, with a return to positive growth likely by the end of 2010

This report looks at the prospects for mobile operators. It focuses on the UK, and Vodafone in particular, because of the high quality of data available to analysts. We think the main conclusions apply widely across European operators.

It is well placed to weather any downturn, though its dependence on recruitment advertising continues to concern outside observers.