Rivals eat into Vodafone revenues
The group reported a 0.8% drop in underlying UK revenues to £1.2 billion for the three months to June 30, against growth of 1.1% the previous quarter.
A raft of mobile phone firms have been launching tariffs offering unlimited data, calls and texts in recent months - such as 02 and 3 with its One plan.
Vodafone said: "Macroeconomic pressures continue to impact consumer confidence adversely. In addition there has been significant competitive pressure during the quarter resulting from competitors introducing a number of new unlimited tariffs."
Shares in the group fell 3% as wider group revenues also showed the impact of the eurozone crisis, with underlying growth slowing sharply to 0.6% after a 1.6% fall across Europe in the first quarter.
Sharp declines in crisis-hit Italy and Spain took their toll, with sales in the regions down 7.7% and 10% respectively. Slowing growth in its star performing markets such as India and Turkey added to the woes, with sales growth in India dropping from 21.1% in the fourth quarter to 16.2%.
Vodafone said it was sticking to its full year outlook despite the first quarter sales blow.
Chief executive Vittorio Colao said the group would continue to keep a tight rein on costs.
He said: "Despite the difficult market conditions, particularly in southern Europe, we continue to make progress in the key areas of data, enterprise and emerging markets, while maintaining tight control of our cost base."
- Sports Direct buys fashion chain
- Updates from Vodafone, Beazley and Cable & Wireless
- Vodafone caught up in new tax row
- Check Vodafone share price