Vodafone has had a good first quarter but is still suffering in Japan where lack of handsets and problems with 3G drove down sales and Average Revenue Per User (ARPU).

Revenue for Vodafone Japan fell six per cent in the three months ended 30 June 2004. The Japanese subsidiary now has 13.2m subscribers and churn numbers are stable. But the company said high levels of competition in Japan meant the cost of acquiring and retaining customers as a percentage of service revenues has risen. ARPU in Japan fell Y2,330 ($21.23) to Y78,365 ($713.03), compared to March 2004.

Worldwide, the mobile network operator has 139.2m customers, 3.1m gained by organic growth in the period and 2.7m gained through acquisitions.

ARPU in the UK rose by five pounds to £314 - helped by a £4 lift from the acquisition of Singlepoint. It fell by one euro in Germany to €309 but rose by one euro in Italy to €362. Vodafone UK gained 132,000 customers in the quarter - taking it to 14.2m.

Total data revenues increased to 16.3 per cent of controlled service revenues for the year to June 2004 up from 15 per cent for the year to June 2003. At the end of June 2004 Vodafone live! had nine million customers with another 1.3m in "non-controlled operations" - companies which Vodafone has a minority stake.

Arun Sarin, chief executive of Vodafone, said: "Data revenues continue to increase helped by Vodafone live! where we now have over nine million controlled customers. These KPIs [key performance indicators] are in line with our expectations and we are therefore reiterating our guidance for the year to March 2005." ®

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