Trading at Vodafone worsened in the third quarter as customers in previously robust northern Europe joined those in the south by cutting phone usage, adding impetus to cost-cutting efforts.

A worse than expected 2.6% drop in organic service revenue in the three months to December 31 marked an acceleration from the 1.4% fall recorded in the second quarter and showed the intense pressure on the world's second-largest mobile operator.

The group maintained its outlook for the year and analysts said the results were not quite as bad as feared after torrid results from Dutch group KPN and Belgium's Mobistar this week.

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Investors also took strength from the line that the full-year decline in earnings margins should show an improving trend, due to cost-restructuring and savings programmes.

"The early spike in the share price is acknowledgment of progress being made," said Richard Hunter, head of equities at broker Hargreaves Lansdown.

"There is also much to do," he added. "Plans are afoot to ratchet up the cost-efficiency programme. Meanwhile, the Indian tax case, general regulatory overhang and the fiercely competitive nature of Vodafone's industry remain serious headwinds."

Telecoms firms across Europe are struggling with the economic pressures while needing to build networks that offer faster speeds for consumers accessing the internet on mobile devices.