Vodafone loss narrows

A mere £9.8bn

Mobile phone behemoth Vodafone posted better than expected full-year results on Tuesday, although its loss still totalled £9.8 billion.

The full-year loss for the world's largest mobile phone company was a substantial improvement over 2002, when its full-year loss totalled £16.2 billion. For the year ended 31 March, turnover across the group jumped 33 per cent to £30.4 billion, and data services made a substantial contribution to this figure, rising 73 pe rcent to £3.6 billion.

Vodafone, whose name comes from the idea of sending both "voice" and "data" by phone, is hopeful that data will play an increasing role in boosting profitability during 2004. In the coming year, the company said that data service revenues are expected to exceed 20 percent of mobile service revenues, up from around 15 percent today.

Importantly, Vodafone announced no plans to write down its investment in 3G licences, for which it paid a hefty £14 billion. Last week rival mobile firm mmO2 said it would write down the value of its licences by some £5.9 billion. But Vodafone did take a massive £14 billion charge for goodwill amortisation, due mostly to the falling value of acquisitions it has made. Before the goodwill charge, Vodafone made a pre-tax profit on ordinary activities of £8.4 billion for the year, up from STG6.2 billion last year.

The company said that its 3G rollout plans were going "according to plan" in Europe, where technical testing is underway. But it said that the availability of suitable handsets is still a problem, and supplies would be limited until 2004. Vodafone said it expects 3G services to be available to customers "before the end of the 2004 financial year."

Across the group Vodafone now has around 120 million customers, showing organic growth of 11 percent over last year. In Ireland the company had 1.73 million customers at the end of 2002 and added another net 11,000 customers this year, to give the company 1.74 million Irish customers at the end of March. Average revenue per user among its Irish customer base continues to be among the highest across the Vodafone group, at €553, second only to subscribers in Japan.

Vodafone is currently in negotiations to sell its stake in the fixed-line business of Japan Telecom Holdings to Ripplewood Holdings of the US. According to media reports on Monday the deal is expected to fetch the company some USD2.2 billion; Vodafone CEO Chris Gent said on Tuesday that talks were ongoing with Ripplewood but that a deal is not yet complete. A deal may not be finalised before July, when Gent retires, to be replaced by Arun Sarin.

Also on Tuesday, Vodafone's Japanese mobile subsidiary J-Phone said it would drop its name and change to Vodafone. J-Phone, which has 14 million customers, said the rebranding should be complete by October. © ENN