Vodafone said service revenue growth in Germany slowed sharply to 0.3% in the third quarter, three months after its biggest market returned to growth, but it stuck to its overall guidance for the year to end-March.

The British group on Monday also reiterated it was in "active discussions" about a possible deal in Italy after it rejected a merger offer with rival Iliad in Italy last month.

Overall service revenue in the quarter was up 4.7%, the same as the previous quarter, as a smaller decline in Spain helped offset the weaker contribution from Germany.

Italy was the group's toughest market, with service revenue declining by 1.3% in the third quarter against a 1.0% drop in the second. (Reporting by Paul Sandle; Editing by Kate Holton)