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Last Updated: Tuesday, 24 January 2006, 08:27 GMT
Strong rise in Vodafone figures
A Japanese woman holding up a Vodafone phone
Vodafone's still faces a tough time and fierce competition in Japan
Mobile phone firm Vodafone added 7.1 million new customers in the key Christmas quarter, ahead of market expectations.

The world's largest mobile phone group by revenues, and the UK's fifth biggest firm by market value, said its global subscriber base was now 179.3 million.

The increase included 561,000 new users in the UK, 906,000 in Germany and 324,000 in Italy.

Vodafone chief Arun Sarin said it was "a good operational performance".

He added: "Sales of 3G devices accelerated in the Christmas quarter and we continue to see encouraging take-up of data services."

Shares in Vodafone were up by more than 2% in early morning trading.

European competition

Mr Sarin said major markets had seen increasing competitor activity, while emerging market businesses had reported strong growth.

"We expect to deliver full-year results in line with our existing guidance and our preliminary outlook for next year remains unchanged."

If they sold Verizon, our view is that there would be a massive uplift in value to shareholders
David Cumming, Standard Life

The firm saw lower growth in Germany, Italy and the UK because of increased competition, but said this had been offset by strong revenue growth in Romania, Egypt and South Africa.

Blended annual average revenue per user (ARPU), a major industry benchmark gauge, fell 7.8% year-on-year in Germany, 8.3% in Italy and 4.3% in the UK, in the face of stiff competition and regulatory drives to cut prices.

In December, Vodafone expanded its presence in emerging markets by buying Turkey's second biggest mobile telephone operator, Telsim, for $4.5bn (2.5bn).

'Refocus operations'

Speculation had been mounting that the firm might be about to bow to shareholder pressure to offload its 45% stake in US firm Verizon Wireless.

David Cumming, from Vodafone's ninth largest shareholder Standard Life, had told the BBC on Monday that he would like to see a sale.

"If they sold Verizon, our view is that there would be a massive uplift in value to shareholders," he said.

"It would allow them to refocus on their operations in Europe and Japan in particular, which have been disappointing."

He said a Verizon sale could add 20% to share value and boost share earnings.

Japanese competition

But in its statement, Vodafone said that Verizon Wireless "continues to perform well in the United States" and that "performance in Japan reflects ongoing execution of its recovery plan".

Later, Mr Sarin said the value of the Verizon stake had appreciated by about $10bn a year for the last couple of years.

"The financial benefits of our holding on to this asset over the last couple of years have been compelling," he said.

"That's why the board has chosen not to sell this asset at this time."

However he did not rule out selling it "in the future" when they had maximised value for shareholders.

Meanwhile, Vodafone conceded that Japan remained a challenging market for the firm.

It faces fierce competition in Japan from rivals such as NTT DoCoMo and KDDI, and has been struggling to halt a decline there ever since the 2004 introduction of its third-generation (3G) service flopped.


SEE ALSO:
Vodafone buys Turkish mobile firm
13 Dec 05 |  Business
Growth concerns rattle Vodafone
15 Nov 05 |  Business
Vodafone and Universal in 3G deal
14 Nov 05 |  Business
Vodafone raises S African stake
04 Nov 05 |  Business
BSkyB in Vodafone mobile TV deal
31 Oct 05 |  Business
Vodafone buys into India's Bharti
28 Oct 05 |  Business


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