(Telecompaper) Vodafone reported a continued decline in underlying service revenues in its fiscal first quarter to June, as the slowdown in southern Europe started to move to its northern Europe operations as well. Total service revenues for the quarter were up 2.5 percent to GBP 10.155 billion, helped by a strong contribution from Verizon Wireless in the US and positive currency effects. However, on an organic basis, service revenues were down 3.5 percent from a year earlier, as a 3.0 percent drop in north Europe and 14.4 percent decline in south Europe could not be offset by 5.9 percent growth in Africa, Asia and the Middle East. Capex increased 6.9 percent from a year earlier to GBP 1.193 billion, and free cash flow rose 2.7 percent to GBP 968 million. Despite the competitive and regulatory pressure in Europe, Vodafone said growth was accelerating in emerging markets and it was making progress on strategic initiatives such as 4G and the planned takeover of Kabel Deutschland. Over 5 million customers are now using its new Red plans, which helped drive a 9 percent organic increase in in-bundle revenues in the quarter. The operator maintained its outlook for the full year for a small rise in adjusted operating profit and stable capex.