Vodafone rings up €328m Irish profit

Shares in Vodafone, the world's biggest mobile operator, dipped more than 5 per cent yesterday after it reported results that failed to beat expectations, writes Jamie Smyth, Technology Reporter

The firm, which has more than 400,000 Irish shareholders, also guided down margin forecasts amid concerns about stiff competition in the Japanese market. Its shares closed at 128¾p, down 6¾p.

Vodafone's Irish subsidiary reported strong results for the year to March showing a 16 per cent rise in operating profit to about €328 million. Turnover was also up 12 per cent at €1.1 billion for the year, although there are signs that growth is stalling.

For the first time in its history, Vodafone Ireland lost customers in a quarter, reducing its overall subscriber base by 7,000 to 1.864 million - a 54 per cent market share. It also failed to report a rise in quarterly average revenue per user (ARPU), which stalled at €582 for the first time, reflecting a more competitive mobile market in the Republic.

Meteor recently reported it had increased its subscriber base to 200,000 for the first time. And O2 said last week that it had added 21,000 subscribers in the quarter.

Mr Paul Donovan, Vodafone Ireland chief executive, said customer numbers fell because of a once-off restructuring of its subscriber base. He said the firm had removed about 10,000 customers who used SIM cards for telemetry products, such as monitoring various meter readings. He said the Irish market was competitive and testament to this was the large number of promotions and price cuts that had taken place.

Vodafone did not release comparative data for the average minutes of use across all its group operations. But the firm said Irish customers continued to use their mobiles over 50 per cent more than the group average of 125 minutes per month.

Vodafone confirmed it would introduce third-generation mobile services next month. These will initially enable consumers to download data at high speeds to their laptops. The firm will introduce mobile handsets for the technology in the autumn.

Meanwhile, Vodafone's Irish shareholders will, from July, be able to direct their queries to the Dublin office of share services firm Computershare, according to Vodafone, which had previously required shareholders to contact Computershare in Britain.

Internationally, Vodafone Group said it had bid £2.6 billion (€3.9 billion) to buy out minority investors in Japan and merge two units to help simplify its Japanese operations. Vodafone, which said it hoped to start turning around its struggling Japanese business from the Christmas quarter as new handsets are delivered, said it did not expect the deal to change its credit rating.

The firm's underlying earnings before interest, tax, depreciation and amortisation climbed 13 per cent to £12.64 billion on a 10 per cent revenue rise to £33.56 billion. Vodafone added 2.5 million customers in the fourth quarter to take its subscriber base to 133.4 million. - (Additional reporting, Reuters)