Vodafone reported a drop in service revenue in its largest market Germany in the first quarter, reflecting broadband and TV losses after a new law ended automatic renewals and a new IT system underperformed.

The mobile and broadband group said its German TV customer base fell by 79,000, resulting in a 0.5% decline in service revenue in the country.

But it said the customer losses were not as bad as in the previous quarter after it fixed IT problems and churn related to the new law that came into effect in December started to abate.

Chief Executive Nick Read said Vodafone had made "good progress" towards stabilising its German operation.

Vodafone's overall service revenue growth accelerated slightly quarter-on-quarter to 2.5%, helped by Turkey, where high inflation is providing a boost, and Britain.

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It said it was on track to hit its full-year targets.

Shares in Vodafone, which have risen 10% in the last 12 months, fell 0.2% in early deals on Monday to 129 pence.

Read said in November he was pursuing consolidation in a number of Vodafone's European markets, as well as opportunities for its towers business, Vantage Towers.

The British company has not announced any major deals since then.

"Our near-term focus on our operational and portfolio priorities remains unchanged," Read said on Monday.

"We've made good progress towards stabilising our commercial performance in Germany, and we continue to actively pursue opportunities with Vantage Towers and to strengthen our market positions in Europe."

+Additional reporting Reuters