Feeds

Vodafone tightens belt by £1bn

Plans to exploit the less exploitative customer

Boost IT visibility and business value

Vodafone's half-year results show profits on the slide and any increase in revenue largely attributable to currency fluctuations, prompting a change of strategy and a new round of cuts to shave £1bn off costs by 2011.

Overall revenue for April to September 2008 is up by 17.1 per cent, to £19.9bn, but the company admits that this increase is "substantially due to foreign currency benefits". It said that revenue for the full year could be as low as £38.8bn - a billion quid less than previously forecast - with adjusted operating profit of £11.0 billion to £11.5 billion.

Consolidated operating profit across the group was down to £4.1bn, from £5.2bn during the same period of 2007. Consolidated profit before taxation, which hit £4.5bn during 2007, came in at £3.3bn this year. This isn't as bad as some analysts were predicting, and led to a small rise in the Vodafone share price during early trading.

However, this is the telecoms industry we're talking about, and the company's announcement highlighted "group adjusted operating profit", which was up by 10.5 per cent to £5.8bn

To address these issues Vittorio Colao, who took over the company in July, replacing Arun Sarin, is planning to focus on getting more money out of existing customers rather than trying to acquire more of them, and to achieve that Vodafone will move towards more subscription-based pricing:

"We will shift our approach away from unit pricing and unit-based tariffs to propositions that deliver much more value to our customers in return for greater commitment."

Which should see the company more interested in subscribers who don't actually use the service very much, as opposed to heavy users, who have traditionally been the most attractive customers.

Making more money from the existing customer base might seem a tall order, especially in Europe where Vodafone admits that "ongoing competitive and regulatory pressures" are having a significant impact - a nod to the caps on roaming introduced at an EU level.

But it's India, Turkey and Africa where Vodafone will be focusing the efforts, rather than the more-developed markets, where punters are already being squeezed just about dry. ®

Secure remote control for conventional and virtual desktops

More from The Register

next story
Déjà vu: Virgin Media jacks up broadband prices
Screw copper phone lines, we're UNIQUE, bleats telco
UK fuzz want PINCODES on ALL mobile phones
Met Police calls for mandatory passwords on all new mobes
Netflix swallows yet another bitter pill, inks peering deal with TWC
Net neutrality crusader once again pays up for priority access
Fifteen zero days found in hacker router comp romp
Four routers rooted in SOHOpelessly Broken challenge
New Sprint CEO says he will lower axe on staff – but prices come first
'Very disruptive' new rates to be revealed next week
US TV stations bowl sueball directly at FCC's spectrum mega-sale
Broadcasters upset about coverage and cost as they shift up and down the dials
UK mobile coverage is BETTER than EVER, networks tell Ofcom
Regulator swallows this line and parrots it back out at us. What are they playing at?
What's the nature of your emergency, Vodafone?
Oh, you've dialled the wrong number for ad fibs, rules ASA
EE network whacked by 'PDP authentication failure' blunder
Carrier is 'aware' of cockup, working on a fix NOW
ROAD TRIP! An FCC road trip – Leahy demands net neutrality debate across US
You crashed watchdog's site, now time to crash its ears
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 10 endpoint backup mistakes
Avoid the ten endpoint backup mistakes to ensure that your critical corporate data is protected and end user productivity is improved.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.