Vodafone Group, the world\'s largest mobile phone company, reported better than expected service revenue growth for the fiscal first quarter as demand for phones that can surf the web bolstered data sales. Service revenue excluding currency swings and acquisitions in the three months through to June rose 1.5 per cent, the company said. Analysts estimated growth of 1.4 per cent. Data revenue grew by 25 per cent as more consumers used so-called smartphones. Service sales include voice, data, messaging and broadband services. It excludes handsets and accessories. \"It\'s a robust set of numbers, if anything slightly ahead of what people were looking for,\" said Morten Singleton, an analyst at Investec Securities in London. Vodafone, based in Newbury, England, has sought to drive data sales from smartphones including Apple\'s iPhone and handsets running Google\'s Android software to counter declining European service revenue. Total sales rose 3.5 per cent to £11.7 billion (Dh42.9 billion) in the fiscal first quarter, the company said. The stock rose as much as two per cent to 164.50 pence in London trading and was up 1.5 per cent as of 8.07am. Before today, the shares declined 2.7 per cent this year, while the FTSE 100 benchmark index was unchanged. \"We have made a good start to the year, reporting robust results despite challenging macroeconomic conditions across southern European economies and the impact of cuts to mobile termination rates,\" chief executive officer Vittorio Colao said in the statement. Organic service revenue growth still slowed from a 2.5 per cent increase in the prior quarter because of a decline in southern European markets and a cut in UK mobile phone fees. In Spain, where the company recently replaced its top manager, Vodafone is struggling to boost sales amid the highest unemployment rate in Europe. In Spain, service revenue declined by 9.9 per cent. Colao said the company decided to cut prices in the country to be more competitive, adding that Vodafone isn\'t considering reducing its workforce. The decline in Spain compares with growth of 32 per cent in Turkey, 17 per cent in India, 1.7 per cent in the UK and 0.2 per cent in Germany, the company\'s biggest market. Under Colao, annual sales from mobile data have climbed to more than £5 billion since he took control of the company in 2008. The British operator has said it plans to increase the percentage of sales from smartphones in Europe to about 70 per cent in the fiscal year ending March 2013 from 30 per cent last year. The company is switching to tiered pricing plans based on the amount of data used and quality of service. Vodafone said in May it will write down the value of its businesses in Spain, Greece, Portugal, Italy and Ireland by £6.1 billion, following higher discount rates. Italy and Spain are the second and third biggest markets for the company after Germany. The company reiterated its full year forecast. Vodafone is also seeking a dividend from its 45 per cent stake in Verizon Wireless, the largest US wireless provider. Chief financial officer Andy Halford said in June the company could potentially get an annual payment of as much as $5.5 billion. Colao this month completed his plan to unwind some of his predecessors\' takeovers with the sale of Vodafone\'s 24 per cent holding in Poland\'s Polkomtel SA for about ¤920 million. Arun Sarin pushed Vodafone into markets such as Ghana and Turkey. Christopher Gent led Vodafone through a six-year $300 billion acquisition spree. Colao, who became deputy CEO in October 2006 and was promoted to the top job in July 2008, has generated 12 per cent in annualised returns for Vodafone shareholders under his watch, according to Bloomberg data. From / Gulf News