5/19/2009 12:03:00 PM
Vodafone UK reports profits dive as consumers rein in spending
Vodafone UK has reported a 45% dive in profits to £235m, from £431m in Q1 2008, as consumers reigned in their spending both in the UK and abroad.
The network reported its results for the first quarter ended March 31 today (19 March).
Vodafone reported a 7.3% fall in revenue from calls in the UK and said roaming charges fell as both business and leisure travel declined. Service revenue declined by 1.1%.
Vodafone ended the quarter with UK ARPU at £20.80 – down from £21.50 in the previous quarter and £21.60 in the same quarter of 2008. Contract ARPU was £37.90 – down from £41.20, as the company was forced to discount to retain customers. Prepaid ARPU fell to £8.20, from £8.40 one year earlier.
The network lost 450,000 UK customers during the quarter, bringing its total number to 18.7 million at the end of March 2009. The loss will hinder Vodafone further in catching up with O2, the UK's biggest operator, which added 250,000 customers in the first quarter of this year.
However, the company’s wholesale revenue increased, due to success from its MVNOs ASDA and Lebara.
In February, Vodafone cut 500 UK jobs as part of a £1bn cost cutting programme first announced in November 2008.
Vodafone chief Vittorio Colao said the company would step up the plan to achieve 65% of the cost savings by March 2010, as the company also announced a £5.9bn impairment charge today due to problems in Spain and Turkey.