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Last Updated: Tuesday, 16 November, 2004, 17:05 GMT
Vodafone upbeat as 3G takes off
Vodafone shopfront
This Christmas could be a happy one for 3G, Vodafone hopes
Mobile phone giant Vodafone has doubled its dividend to shareholders following the "successful" launch of its third-generation (3G) services.

The company is also expanding its share buyback scheme by one-third to about 4bn ($7.4bn) thanks to strong underlying half-year profits.

Pre-tax profits were flat at 5.4bn, tempered by revenue loss following the sale of its Japanese fixed-line arm.

The 100% dividend rise to 1.91p was at the top end of analysts' expectations.

Vodafone, the world's largest mobile phone company by revenue, said it also expected to double its full-year dividend.

There was a muted reaction to the news, with Vodafone shares closing down 0.75p at 142p.

"We continue to believe that the introduction of 3G will limit earnings growth next year," Seymour Pierce analyst Dan Gardiner told the Press Association news agency.

3G Christmas

Last week, Vodafone launched its UK 3G services for mobile phones, offering video calls, music downloads and games, enabling users to download data at a faster rate than before.

Overall, the business is performing well and on track with our expectations at the beginning of the year
Arun Sarin, chief executive

Vodafone and rival mobile company 3, owned by Hutchison, are the only UK telecoms firms offering 3G services to mobile phones.

However, rivals Orange and T-Mobile are getting ready to launch their UK 3G services in the run up to Christmas.

Vodafone said it had won 7.4 million new customers in the first half, lifting the number of subscribers to 146.7 million worldwide.

The only rival with more subscribers is China Mobile (Hong Kong) Ltd, which has 194.4 million customers.

"Overall, the business is performing well and on track with our expectations at the beginning of the year," said chief executive Arun Sarin.

Consolidation

Vodafone reported strong performances at its UK, Spanish and German operations, as well as at its US joint venture Verizon Wireless.

Vodafone shares

This offset weakness in its struggling Japanese unit, Vodafone Holdings and the impact of the strength of sterling against the euro and yen.

Vodafone said it was "excited" about the future growth prospects, particularly in light of last week's launch of mass-market 3G mobile phone services which were rolled out in 13 separate countries.

The company's decision to increase the amount of cash it returns to investors marks a major shift for the Newbury-based group.

After a period of expansion, which it achieved largely through acquisitions, the company is now settling into a period of consolidation.


BBC NEWS: VIDEO AND AUDIO
Why Vodafone investors are profiting from 3G services



SEE ALSO:
Dreaming of a 3G Christmas
11 Nov 04 |  Business
UK gearing up for 3G Christmas
17 Oct 04 |  Business
Vodafone begins 3G mobile service
10 Nov 04 |  Business
Vodafone sees user loss in Japan
06 Aug 04 |  Business
Vodafone launches 3G in Europe
04 May 04 |  Business
Vodafone extends UK 3G coverage
02 Apr 04 |  Business


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