A woman walks past the logo of Vodafone company in Luxembourg in this picture taken on November 20, 2012. REUTERS/Francois Lenoir (LUXEMBOURG - Tags: BUSINESS POLITICS) Picture taken on November 20, 2012.

London - Britain's Vodafone said it was confident its revenue would start to improve due to the take up of faster 4G services and cost cuts, after reporting another sharp fall in quarterly organic service revenue.

The world's second largest mobile operator, which is investing to improve the speed and coverage of its networks after selling its US arm in a $130 billion deal, said organic service revenue was down 4.8 percent in the three months to the end of December.

It fell by 4.9 percent in the previous quarter.

The group, Britain's third largest company, has reported sharp falls in its key revenue measurement in the last 18 months due to regulatory-imposed price cuts, fierce competition and European consumers reducing the number of calls they make during the downturn.

Thursday's trading update showed organic service revenue down 9.6 in Europe and up 5.5 in its faster growing emerging market division of Africa, Middle East and Asia Pacific.

“In Europe, conditions are still difficult, and we continue to mitigate these challenges through on-going improvements to our operating model and cost efficiency,” Chief Executive Vittorio Colao said.

“In addition, the shift to 4G is gaining momentum and we have seen improving mobile customer net addition trends. We are therefore optimistic that our revenue performance will begin to improve as regulatory headwinds ease and customer appetite for video and content services increases.”

Vodafone described the pressures in Europe, where it competes with the likes of Telefonica, Orange and Deutsche Telekom, as intense.

Organic service revenue in Germany, its biggest market in Europe, was down 7.9 percent, although increased investment in the quarter did result in improved customer additions, it said.

Britain declined by 5.1 percent while Italy was down 16.6 percent. - Reuters