LONDON, Feb 2 Reuters Vodafone, the telecoms group targeted by activist investor Cevian Capital, said it was working to improve shareholder returns by tackling weaker parts of its business, as it reported a rise in quarterly revenue.

Chief Executive Nick Read said Vodafone had delivered a solid quarter, with a 2.7 rise in thirdquarter group service revenue, including consistent growth in its biggest market Germany.

Analysts, however, said investors were focused on consolidation opportunities in markets such as Italy and Spain, which have long been problematic for Vodafone.

Chief Executive Nick Read, who has called for regulators to allow more consolidation, said We are also committed to creating value for our shareholders through proactive portfolio actions and continuing to improve returns at pace.

The group is focused on strengthening commercial momentum in Germany, he said, and accelerating its transformation in Spain, where revenue continued to decline.

Vodafone lost 53,000 contract mobile customers and 50,000 broadband customers in Spain, while it recorded its eighth consecutive quarter of decline in Italy.

Shares in Vodafone, which are trading at the same level as 12 months ago, were 2.8 higher in early deals.

Analysts at Citi said they believed the numbers should be satisfactory for the market.

The focus is firmly on developments in terms of inmarket consolidation in UKItaly and Spain and other initiatives, including the deconsolidation of towers business…