This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Vodafone Group Chief Executive Vittorio Colao, reporting improving results in Europe, said he expected further jockeying among British telecommunications companies after a bid to merge two wireless-phone rivals was blocked by European Union regulators.

"Of course there will be moving parts in the system," Colao said on a conference call with analysts Tuesday after reporting fourth-quarter results that beat analysts' estimates. "My prediction is that there will be commercial alliances, possibly deals, but it's very hard to see who with whom."

Telecom companies are assessing options in Britain after the E.U. rejected CK Hutchison Holdings Ltd.'s $14.5 billion bid for a Vodafone competitor, Telefonica SA's O2.

Colao said E.U. Competition Commissioner Margrethe Vestager was right to block the deal,because it could have lessened competition and complicated network-sharing agreements like the one that Vodafone has with O2.

"It's good to have consolidation but it should not come at the cost of lower competition," Colao said.

Vodafone and other European telecom companies are scrambling to roll out offers that bundle mobile, broadband, fixed-line telephony and television services.

Vodafone and cable provider Liberty Global Plc in February agreed to pool their businesses in the Netherlands. The companies previously failed to agree on a broader business combination, people familiar with the situation have said.

With a two-year, $27.5 billion investment completed, Vodafone is making progress with its "convergence" strategy, increasing the number of broadband and fixed-line customers, Colao said.

The company will target capital investments in the mid-teens as a percentage of annual revenue, higher than it had previously forecast, to take advantage of opportunities to accelerate growth, it said.

The company reported quarterly revenue growth on its network in Europe for the first time since December 2010, as business improved in Italy and Germany. Competition remains tough in Britain, where fixed-line operator BT Group Plc in January completed its acquisition of mobile carrier EE.

Organic service revenue, which includes customer fees but excludes handset sales, rose 2.5 percent in the three months through March 31, Newbury, England-based Vodafone said Tuesday in a statement. Adjusted for one-time factors such as the leap year, service revenue rose 1.8 percent.

Analysts surveyed by Bloomberg expected 1.5 percent growth, on average.

For the full fiscal year ended in March, Vodafone posted earnings before interest, taxes, depreciation and amortization of 11.6 billion pounds, below analyst expectations of 11.7 billion pounds. Group revenue fell 3 percent to 41 billion pounds, though organic revenue, which strips out M&A and foreign currency fluctuations.

For the current fiscal year, Vodafone forecast organic EBITDA in a range of 12.4 billion pounds to 12.8 billion pounds.