31 May 2006

The Web
Business Today

Vodafone international posts record loss

Vodafone, the world’s largest mobile phone operator, yesterday announced its full year results showing a pre-tax loss of GBP14.85 billion, which is the biggest annual loss by a European company.
Investors were however handed a sweetener in that they will earn a higher dividend than expected. Vodafone will give its investors a dividend of GBP9 billion, of which GBP6 billion refer to the proceeds from the sale of its Japan operation.
The company is undertaking major cost cutting measures, including the reduction of 400 jobs from its head office.
The financial results show that Vodafone revenue has exceeded GBP 29.3 billion and the overall loss for the period is GBP17.2 billion.
Arun Sarin, the company’s chief executive stated that things are not looking well, as the company expects lower growth in the future as the competitive environment gets more intense and regulatory authorities are pushing for more price reductions for Vodafone’s termination rates.
Sarun was however upbeat that growth will be registered through Vodafone’s operation in developing countries, as penetration is still low. This will possibly add more customers to the current base of 170 million world-wide.
The full year results also included figures for the Malta operation. Vodafone Malta had a customer base of 167,000 as at April 2005, increasing by 10,000 by year end. However, the Malta operation in the first quarter of 2006 lost 2,000 customers to register a subscriber base of 175,000.
The Malta operation is also experiencing a reduction in the average revenue per unit per month, which now stands at Lm12.10. This is earned through Lm54.40 per month from contract customers and Lm6.90 per month from prepaid customers that make up 90 per cent of Vodafone Malta’s customer base.

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