Vodafone is to cut 500 jobs in Germany due to a mixture of competitive and regulatory pressures.

According to a Reuters report, Vodafone Germany further aims to move some of its operations to Romania and India, as well as to “considerably reduce starting salaries”, as part of a two-year programme.

When Vodafone announced its half-year results last November, most of the bad news came from Spain and Italy. More worryingly for Vodafone shareholders is that falls in organic service revenue (which excludes the effects of mergers and acquisitions) have now spread to the group’s Northern and Central Europe units.

In Germany, which accounts for about a fifth of group service revenue, organic growth slid by 0.2 per cent during the three months to 31 December 2012. The downturn reflects another cut made to German MTRs (mobile termination rates) on 1 December, as well as ARPU declines through stiffer competition.

By stark contrast, organic service revenue grew by 3 per cent in Germany over the six months ended 31 October.

Regular cuts to European MTRs, something which group chief executive Vittorio Colao has long complained about, continues to take its toll on the top line. During the twelve months to December, the Vodafone Group saw MTR revenue drop by £218 million.

Since MTRs are charged by operators to complete calls originating on other networks, rate cuts have a greater adverse impact on larger players – like Vodafone – as they terminate more calls than smaller rivals.

Vodafone’s overall service revenue in Northern and Central Europe — despite a relatively strong showing from Turkey — fell by 0.9 per cent during the three months ended 31 December (following a 1.5 per cent rise in the previous six months).

The decline is modest compared with the 11.3 per cent and 13.8 per cent slumps in Spain and Italy respectively over the same three-month period, but it’s a worrying trend for shareholders nonetheless.

Vodafone announces preliminary group results for the year ended 31 March 2013 on 21 May.