Shares of Vodafone Group PLC (VOD) plummeted 5.06% in pre-market trading on Tuesday, as the telecommunications giant grappled with a sharp revenue decline in its key German market, offsetting growth in other regions.

The company reported a 7.6% drop in revenue in Germany for the third quarter, its biggest market accounting for 34% of group service revenue. Service revenue in the country fell 6.4% to €2.89 billion, partly due to the impact of regulatory changes that prevent landlords from bundling TV services with rental agreements, as well as a lower broadband customer base.

CEO Margherita Della Valle acknowledged that the turnaround in Germany will take time, as the group absorbs the impact of the law change and faces a highly competitive market environment. Vodafone's struggles in the country overshadowed positive performance elsewhere, including a 3.3% organic growth in UK service revenue, boosted by investments in customer experience.

At the group level, service revenue rose 5.6% to €7.93 billion, while adjusted EBITDA increased 2.2% organically to €2.83 billion, driven by service revenue growth in most markets and lower energy costs in Europe that offset the decline in Germany. Vodafone reiterated its fiscal 2025 guidance, projecting adjusted EBITDA of around €11 billion and adjusted free cash flow of at least €2.4 billion. The company also launched a share buyback of up to €480 million to reduce its share capital.