Vodafone issues sales warning and admits £28bn assets hole

Vodafone has written off up to £28bn from its balance sheet and warned that it faces a slowdown in sales growth as a result of increased competition.

Vodafone has written off up to £28bn from its balance sheet and warned that it faces a slowdown in sales growth as a result of increased competition.

The company has also said future sales will be affected by national regulators forcing the it to reduce the charges it levies against other mobile and fixed operators, for putting their callers through to its customers.

The European Commission is also determined to bring down international mobile roaming charges for customers, which the Commission and most customers feel are too high.

The world’s biggest mobile operator is to take a hit of between £23bn and £28bn to address an assets over-evaluation, mainly related to the assets it acquired with the £112bn takeover of Germany’s Mannesmann in 2000.

Vodafone said increased competition would see sales growth slow to between 5% and 6.5% in the year to March 2007. Previous forecasts for 2006 had been between 6% and 9%.

As a result, profit margins will slip in the next financial year, said Vodafone. The company said that this year's results would be unaffected by its latest business outlook.

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