Vodafone said on Tuesday it was ramping up investment in its network after reporting a drop in core profit for the first half of its financial year.
The U.K. mobile telecommunications group said it would spend around £7 billion to improve its existing 3G network in Europe and to accelerate the building of its super-fast 4G network.
The group reported core profit -- or earnings before interest, taxes, depreciation and amortization (EBITDA) -- of £6.6 billion for the first half of 2013, ahead of a forecast of £6.4 billion in a poll by Reuters. The figure was down 4.1 percent from the same time last year, however.
The company confirmed its full-year guidance and said it was on track to deliver adjusted operating profit of around £5 billion and free cash flow in the £4.5 billion–£5.0 billion range.
Shares of Vodafone were trading up 1 percent in mid-morning trade on Tuesday.
Emerging markets continued to deliver strong results, with growing revenue and increasing margins, but the environment in Europe remained "challenging", the group said in a statement.
"Our emerging markets businesses are performing very well, driven by rapidly increasing smartphone penetration and data usage. In mature markets, our performance reflects more challenging conditions, which we continue to mitigate through ongoing actions to improve our operating model and cost efficiency," CEO Vittorio Colao said in a statement.
One of the main challenges that the cellphone operator faces in Europe, apart from falling revenues in the continent, is the European Commission's plans to scrap mobile roaming charges from July 2014.
(Read more: EU plans to end roaming fees to hit telcos from 2014)
The move has prompted analysts to warn that it leaves telecoms companies with the prospect of wafer-thin profit margins and paves the way for mergers in the sector.