Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education

Front Page



UK Politics







Talking Point

In Depth

On Air

Low Graphics

Tuesday, June 8, 1999 Published at 19:55 GMT 20:55 UK

Business: The Company File

Vodafone rings up top profits

As mobile phones discover the Internet, business is set to boom

UK mobile phone operator Vodafone has reported a 44% rise in its profits, yet another sign of the strong performance of the mobile phone industry world wide.

Ann Scott: Britain's largest mobile phone company may become part of the world's largest
The company, which now has more than 10 million customers, said its full year pre-tax profit had reached £935.2m.

However, the rapid growth has hit the quality of customer service, and Vodafone had to rush to open a new call-centre in Birmingham to cope with the demand.

Profit padding

The profit figure looks better than the actual performance of the business, as it is bolstered by a £66.7m gain from selling parts of the company.

[ image:  ]
Excluding the exceptional income, Vodafone made a profit of £868.5m - a touch below the forecast of analysts, who had expected a profit figure of about £870m.

Vodafone is currently in the middle of a merger with US mobile phone operator AirTouch.

Chief Executive Chris Gent said in a statement: "When completed, our transaction with AirTouch will more than double our potential for growth in both conventional cellular telephony, in which we will be a clear world leader, and in the new services which will mark the arrival of the wireless information age."

Once the merger is complete, the company wants to propose to its investors a four-for-one share split, in a bid to make its shares cheaper for new investors.

Rory Cellan-Jones: Love them or hate them, mobile phone usage is set to continue rising
During the coming year, the company expects to invest about £1bn "on tangible fixed assets". About half of the sum will be spent in the UK.

The rest of the money will go to the Netherlands, Australia and Greece "to enhance capacity and improve quality of service".

Vodafone's shares, which firmed ahead of the results, rose 16 pence or 1.3% to close at 12.98 pounds on the London stock exchange.

Ten million customers

Last year, the Vodafone added 4.6 million customers to its books, taking the total number to a record 10.445 million.

The UK continues to be Vodafone's main market, with more than half of the total customer base.

The biggest success was the company's 'Pay As You Talk' service, which now has 1.8 million customers, up from a mere 198,000 a year earlier.

Growing pains

The company admitted that the dramatic take up of mobile phones put the quality of its customer service under strain.

In March, Vodafone rushed a new 500-staff customer call centre in Birmingham into action.

Lord MacLaurin, chairman of Vodafone said: "On occasions in the year UK growth was so rapid that it caused some problems to the company's customers-facing systems, but the professionalism and dedication of the whole team has enabled the group to present record results on all measures."

Advanced options | Search tips

Back to top | BBC News Home | BBC Homepage | ©

The Company File Contents

Relevant Stories

08 Jun 99 | The Company File
Mobile phones, the new fashion accessory

06 Jun 99 | The Company File
Virgin targets mobile phones

16 Apr 99 | The Company File
Mobile calls cut again

18 Jan 99 | The Company File
Mammoth mobile merger

08 Jan 99 | The Company File
Telecoms industry in merger mania

17 Nov 98 | The Company File
Dialling up the profits

Internet Links


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

In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles