Vodafone picks up job axe

Vodafone, the world's largest mobile phone company, is cutting 650 jobs.

The company, which employs about 10,000 people in the UK, blames a change in the mobile phone market for the cuts.

It will now concentrate less on building new networks and more on retaining customers and improving services.

The building of the new third-generation (3G) mobile phone networks has been a severe financial strain on mobile phone firms around the world, who have made enormous investments with little guarantee of any return for their money.

Dwindling customer growth

Vodafone paid £5.96bn for its 3G licence in the UK.

But the popularity of the new services, that promise faster and more advanced services to mobile users but have yet to be launched, remains in doubt.

It is partly this uncertainty over the return on 3G investments that has created the slump in the telecoms sector.

Furthermore, the boom in the number of customers buying mobile phones has begun to slow substantially.

Vodafone added 3 million new subscribers in the third quarter of this year, compared with 4.4 million in the previous three months.

"It reflects our move away from growing customer numbers towards persuading customers to use more of our services," a Vodafone spokesman said.

BT blues

But Vodafone has so far fared better than many of its competitors, its archrival BT in particular.

BT has been forced to axe 6,000 jobs this year, in a far reaching programme to cut costs.

The redundancies at Vodafone are expected to come into effect in January, and will cost the group £14m in redundancy pay.

About a third of the job losses will be at the company's headquarters in Newbury, with the rest spread throughout the UK.

In the City, Vodafone shares closed 3.75p higher at 160p on Tuesday.