11/10/2009 10:39:00 AM
Vodafone doubles cost-cutting target - November 2009
Vodafone has doubled its cost-cutting target to £2bn as it fights with increasing competition and a slow demand.
The company will deliver its £1bn cost-cutting drive, announced late 2008, one year earlier than planned in March 2010. It will aim to save the further £1bn by 2012.
The operator reported a 73% surge in group first-half pre-tax profits to £5.7bn, with revenue up 9% £21.8bn.
However, the group’s UK revenue dropped by 5.7% as the operator lost customers to O2, which until recently held exclusive rights to Apple’s popular iPhone. Vodafone will begin to sell the iPhone at Christmas.
Vodafone, which sped up its cost-saving plan in May, has already cut 500 jobs in the UK and scaled back its advertising and marketing operations.
India remains Vodafone’s toughest market because of an intense price war.
Vodafone CEO Vittorio Colao said: ‘The group has performed in line with our expectations and we have made strong progress with our strategic priorities, in particular in mobile data and cash generation. We have confirmed our guidance for the full year, despite the uncertainties of current economic trends. The £1bn cost reduction programme is expected to be delivered one year ahead of plan and we have extended this to a further £1bn of cost savings by 2012.
‘At the same time, we have maintained our capital investment at £2.6bn in the first half, delivering further improvements in network quality and performance for our customers. We have continued to develop innovative services for businesses and consumers, such as Vodafone One Net and Vodafone 360, and to expand our fixed-line services. We will continue our focus on the delivery of our growth strategy, particularly in data services.’