Vodafone's revenue rockets

Vodafone Ireland customers spend more on mobile services than their counterparts in any other Vodafone group company.

However, the State's biggest mobile firm continues to grow, adding 39,000 subscribers in the three months to the end of 2004.

Performance figures released by Vodafone yesterday show that its Irish subscribers spend on average €602 per year, almost double the revenue generated by Vodafone's German subscribers.

The gap between Vodafone Ireland and Vodafone Japan - its nearest rival in terms of average revenue per user (ARPU) - widened in the quarter as the firm's Japanese unit performed poorly.

The ARPU figure is a key metric used by the telecoms industry to measure the performance of a company over a 12-month period.

Vodafone Ireland's ARPU increased to €602 in the three months to the end of 2004, up from €596 in the prior quarter.

Vodafone said its exceptional operating performance was driven by the highest levels of outgoing voice usage per customer within the group.

However, the results are likely to be seized upon by the telecoms regulator as further evidence that the company is dominant in the Republic.

The Commission for Communications Regulation (ComReg) has signalled that high Irish ARPU is one of the main reasons that it recently decided to force Vodafone and O2 to open their mobile networks to competitors.

This decision, if it survives a challenge by the mobile firms, will enable virtual operators to lease airtime from the operators and offer services to customers.

In a statement accompanying Vodafone's key performance indicators, Mr Gerry Fahy called on ComReg to change its position on the issue of wholesale access.

"It is clear that competitive pressures have never been as intense in the Irish marketplace as they are now," he added.

Vodafone Ireland added 39,000 new customers in the crucial Christmas quarter, when the majority of new mobile handsets are purchased by subscribers. It now has 1.93 million subscribers,which accounts for more than 50 per cent of the Irish market.

About 72 per cent of the firm's Irish subscribers use pre-paid handsets rather than sign a 12-month contract with the company.

The wider Vodafone Group, which is the biggest mobile firm in the world, also experienced a good quarter, adding five million subscribers to bring total customer numbers to 151.8 million.

But the firm said its Japanese unit had underperformed and that it had experienced falling ARPUs in the British and German markets.

Vodafone chief executive, Mr Arun Sarin, said Vodafone remained on track to turn around Vodafone KK, Japan's third-largest mobile firm, in 18 to 24 months from May 2004.

But he said delays in getting competitive third-generation (3G) phones into the Japanese market would hit the firm's year-end sales.

Shares in Vodafone subsided after a strong start in trading, ending the day 0.5 pence off at 139.25 pence (€2.01).