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Admits 12 per cent of its customers don't exist

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Vodafone is facing the prospect of another set of profit warnings after it admitted 12 per cent of its customers are "inactive" and haven't used their phones for three months. It also said that those still using their phones are spending less. Worldwide, eight million of its 83 million customers are "ghost" users.

The blame of this fall has been put on cheap pre-pay phones, which may explain the company's decision to double the price of its pre-pay handsets last month after One2One did the same. The other UK operators followed soon after.

The company also urged BT Cellnet, One2One and Orange to follow its lead and come clean about their true customer figures and those that had left for cheaper deals [Add-in. Orange has quite rightly been on to us to explain that it has always posted the number of "active" users. We are bad and wrong to suggest otherwise]. According to previous figures, Vodafone leads the UK with 12.3 million customers, then comes BT Cellnet with 11.2 million, Orange with 11 million and One2One with nine million.

Talking of Orange, ex-head of the company Hans Snook had a go at the government yesterday, saying that it had stifled competition and limited the services they can offer because it thinks it understands businesses better than they do.

It's all go in the mobile business at the moment. ®

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