Vodafone revenue up as data use rises

Vodafone Group has reported a 10% increase in revenue for its 2004 financial year, and said losses after exceptional items were...

Vodafone Group has reported a 10% increase in revenue for its 2004 financial year, and said losses after exceptional items were down by 8%.

In announcing its preliminary results for the year ending 31 March, Vodafone said group operating profit before goodwill amortisation and exceptional items rose 17%.  The company attributed the performance to strong customer growth and increasing use of data services.

Group revenue rose to £33.6bn, compared with £30.4bn for the previous year. For the year, 16.1% of revenue came from data services, up from 14.6%.

The net loss shrunk from £9.8bn in 2003 to £9bn for 2004. Operating profit before goodwill amortisation and exceptional items rose to £10.7bn from £9.2bn in 2003.

Over the year, proportionate customer numbers increased by 13.7 million to 133.4 million, the company said. Vodafone counts subscribers in proportion to its holding in companies it does not wholly own. Subscribers made 154.8 billion minutes of calls during the year on networks where Vodafone has a controlling stake, up 11% on the previous year.

Average revenue per user (ARPU) rose in the UK and Italy by 6% and 4% respectively, but in Japan it fell by 7%.

ARPU also declined in Germany, because of its sluggish economy, and the fact that newer customers are spending less than existing ones. Vodafone is moving away from the prepay market in Germany: now nearly half of its German customers are on a contract.

In the US, where Vodafone owns a minority stake in operator Verizon Wireless, ARPU rose 3% as a result of higher phone use, especially of data and messaging services,.

Japan remains a difficult area for Vodafone, where a lack of handsets for third-generation mobile services is having a disproportionate effect on the company's ability to compete in the market. There, Vodafone has market share of just 18% and faces fierce competition from entrenched rival NTT DoCoMo.

While DoCoMo is dominant in Japan, Vodafone sees a chance to differentiate itself in the corporate sector there because of its international reach, which is of more concern for business users than consumers.

Worldwide, Vodafone chief executive officer Arun Sarin expected mobile revenue to grow organically by a percentage in the high single digits.

As for growth by acquisition, that may be on the cards too. "We would like to expand our holdings in France and Italy - at the right price," Sarin said. "We would also like to expand our minority holdings in Eastern Europe."

Peter Sayer writes for IDG News Service

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