Vodafone numbers up, but trouble looms
Vodafone, the UK’s biggest mobile network operator, increased revenue for the financial year ended 31 March 2011 3.2% to £45.9bn, but profit for the year was down to £7.9bn from £8.6bn. Earnings per share were 15.2p, and the final dividend was 6.05p
CEO Vittoria Collao said the company was benefiting from a decision to increase network capacity and to encourage customers to switch to smart phones which use more data. He said the company was succeeding in converting smartphone customers from “all you can eat” tariffs to tiered data plans, with the result that revenue from data traffic was up more than £1bn to £5.1bn.
It also benefited from sales of its shares in China Mobile, SFR and Softbank Mobile, which together brought in £14.2bn, of which £6.8bn was used to buy back shares.
It ended the year just shy of 371m customers, of which nearly 79% were pre-paid customers.
However, Collao said the company faced serious problems in financially troubled southern Europe, where it wrote off £6.1bn, half of it in Spain. The company also expected lower revenues in future due to regulator-mandated cuts in fees chargeable for terminating calls.
Vodafone has also not yet settled an Indian government claim for more than $1bn in taxes and penalties related to its acquisition of a Hutchinson Whampoa subsidiary that owned an interest in Vodafone’s Indian subsidiary, Vodafone Essar.
More worrying is that average revenue per user was down, and trending down, in every market in which Vodafone trades.