Mobile phone operator Vodafone reported its first quarterly increase in service revenue since the recession began, rising by 4.9 per cent to £10.6 billion.

The firm said the increase in service revenue represented a 1.7 per cent increase on the precious quarter and reflected its increased commercial focus.

Vodafone reported growth in South Africa, India and Turkey and improvement in the UK And Germany.

It also reported capital expenditure was £1,041 million as a result of continued European network investment, including network enhancement in Turkey and continued rollout in India.

Vittorio Colao, chief executive at Vodafone, said, ‘These are the first quarterly results to show service revenue growth since the global recession impacted.

‘We have achieved these results through our continuing commercial approach in key European markets, focusing especially on data, and from strong growth in emerging markets, with India now cash positive at an operating level and our highest ever quarterly revenue in Turkey.’

Nick Raynor, investment adviser at The Share Centre, said the stock remained a favourite, rising by 2 per cent in early morning trading on Friday 23 July to 152p, on the back of the announcement.

Raynor said the firm had benefited from rising demand for the iPhone in the UK, boosting service revenue and its geographical exposure to Central Europe and Africa.

He said, ‘Investors seeking income will also be interested to hear the group are close to receiving a dividend from its holdings in US wireless operator Verizon Wireless.

‘This hasn’t happened since 2005 and will reinforce the pledge Vodafone made in May 2010 to increase annual dividend growth by at least 7% for the next three years.’

Raynor added. ‘Due to its promise of global growth we continue to list Vodafone as a ‘buy’ for medium risk investors geared more towards income.’