Vodafone reported a 2 percent decline in group revenue last quarter as the gloomy economic conditions in Europe continued to impact sales.

Group revenue fell to £11.4 billion in the quarter ending 31 December on the back of double-digit year-on-year declines in struggling southern European markets Italy (-13.8 percent) and Spain (- 11.3 percent). Germany (-0.2 percent) and the UK (-5.2 percent) didn’t fare much better.

“Our results continue to reflect very difficult market conditions in Europe. We are addressing this through firm actions on cost efficiency, and continuing to invest in areas of growth potential,” said CEO Vittorio Colao.

He added that Vodafone Red – the operator’s new “strategic pricing approach in Europe” – had been launched in five markets and that almost half (48.3 percent) of European mobile service revenue was now “in-bundle.”

There was better news outside of Europe with sales growth in India (up 9 percent), South Africa (up 1.9 percent) and Turkey (up 18.4 percent). Service revenue was also up 8.7 percent at Verizon Wireless, the US operator in which Vodafone has a minority stake.

Group data revenue grew by 12.8 percent to £1.7 billion and now accounts for 16.2 percent of total service revenue. European smartphone penetration was up 10 percentage points from a year earlier to 33.4 percent.