Vodafone saw its services revenue rise in the first half of the year as the telecoms giant said it hoped to complete its merger with mobile network Three by early 2025.

The London-listed company said its services revenue rose 1.7% year-on-year to €15.1 billion (£12.5 billion) despite a slowdown in Germany, its biggest market, due to a change in law.

Vodafone said it planned to complete its tie-up with Three UK early next year, pending a final decision on the deal from the competition regulator on December 7.

The Competition and Markets Authority is investigating the deal, which would create the UK’s biggest mobile operator, but has indicated it is likely to get the green light.

“We will continue to engage constructively with the CMA and remain confident that we can work with them to achieve approval,” Vodafone said on Tuesday.

The merger is part of CEO Margherita Della Valle’s turnaround plan, which also includes the sale of operations in Italy, Spain and other countries.

Vodafone said it recorded an operating profit of €2.4 billion (£2 billion) for the six months ended September, up 28.3% year-on-year, mainly due to profit generated by acquisition of an 18% stake in the Indian telecommunications company Indus Towers.

However, service revenue gains were offset by falling revenue from its key businesses in Germany, after the government blocked housing associations from linking TV and rent earlier this year.

Vodafone said service revenue in Germany fell 6.2% last quarter.

Ms Della Valle said the company was making “good progress” on the turnaround plan, with approvals for the Three merger and the sale of its Italian operations “nearing conclusion”.

“These will complement our program to reshape the group for growth.”

She added: “We performed well in all our markets, with the exception of Germany, where we were impacted as expected by the change in the television law.

“I am confident that the actions we are taking will drive growth for Vodafone this year and further acceleration in FY26.”

Matt Britzman, senior equity analyst at Hargreaves Lansdown, said the group “continues to face several challenges before it can hope to call this turnaround complete, from major portfolio stocks to persistently weak performance in key market German”.

“The clean-up of the portfolio is well underway, with the Spanish subsidiary out of sight and the Italian subsidiary soon to follow, but investors will have to settle for a lower dividend level in the future.”