BBC Home
Explore the BBC
BBC News
Launch consoleBBC NEWS CHANNEL
Last Updated: Tuesday, 25 May, 2004, 14:39 GMT 15:39 UK
Vodafone cuts bottom-line losses
Vodafone user
Vodafone hopes the share buyback will cheer investors
A boost in customer numbers has helped mobile phone giant Vodafone cut its full-year losses to 5bn ($8.9bn).

The firm's bottom-line loss, fuelled by charges of 15.2bn brought about by recent acquisitions, was an improvement on last year's 6.2bn loss.

On an underlying basis, Vodafone saw a 19% rise in pre-tax profits to 10bn.

The group increased its customer base by 13.7 million to 133.4 million. The UK company also announced a 3bn share buyback programme.

Japan buyout

Vodafone, which is the world's largest mobile phone company by revenue, has already spent 1.1bn on share buyback programmes since November 2003.

Vodafone share price

The company has been under pressure to release the amount of cash it returns to shareholders since bailing out of a $41bn bid for US operator AT&T Wireless, earlier this year.

Separately, Vodafone said it was planning a 2.6bn buyout of minority shareholders in its business in Japan, where it has struggled to maintain market share.

The unit - Vodafone Holdings KK - reported a net loss of 100bn yen, including a one-off charge relating to the sale of its fixed-line business Japan Telecom to a US private equity firm in November.

High expectations

Chief executive Arun Sarin described Vodafone's overall results as a "strong operational performance".

Speaking to BBC World Business Report, he said: "We are transitioning our business from a 2nd generation technology to a 3rd generation technology."

In its home market, Vodafone saw turnover rise by 18% to 4.7bn, while customer numbers rose by 6% to 14.1m.

However, despite the sales growth, margins in the UK dipped 4.4 percentage points to 33.9%, as the company increased investment to acquire and retain customers.

Mark James, an international analyst with Nomura, said: "Expectations for the group results were high, and Vodafone could not afford to disappoint. Unfortunately, we believe it has."

New 3G launch

Meanwhile, Vodafone has started selling third-generation (3G) videophones in two of its key markets in Spain and Italy.

The phones feature advanced video clip services, improved ringtones and fresh content, the group said.

A limited launch of 3G phones took place in Germany and Portugal earlier in the month.

It has already launched 3G phones in Japan but with limited success, securing less than 1% of the 3G market.

Vodafone said it plans a full commercial launch in Europe in the autumn when "millions" of handsets will be in the shops

Shares in Vodafone were down 6.75 pence, or 5%, at 128.75 pence on the London Stock Exchange at the close of trade.

The BBC's Mae Loon
"The company's been on an aggressive shopping spree"

BT forges Vodafone mobile tie-up
18 May 04  |  Business
Vodafone launches 3G in Europe
04 May 04  |  Business
3G - A Mobile Revolution?
02 Apr 04  |  Business
Vodafone extends UK 3G coverage
02 Apr 04  |  Business
Tapping into the potential of 3G
02 Apr 04  |  Technology
European mobile firms join forces
29 Mar 04  |  Business

The BBC is not responsible for the content of external internet sites


News Front Page | World | UK | England | Northern Ireland | Scotland | Wales | Politics
Business | Entertainment | Science/Nature | Technology | Health | Education
Have Your Say | Magazine | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific