Vodafone Ireland cuts its value by €1.14bn
Mobile operator Vodafone slashed the value of Irish operations by €1.14bn last year because it was forced to heavily discount prices in the embattled economy in order to retain customers.
It revealed the startling impairment yesterday as it released full-year group results for the 12 months to the end of March. The write-down was part of an overall €7bn impairment the group shouldered as it cut the value of its operations in Ireland, Spain, Portugal, Italy and Greece.
The write-down of the Irish business was the third highest amount after Vodafone's Spanish division, which the company impaired by nearly €3.4bn, and its Italian unit, which was cut by €1.2bn. The total write-down was nearly triple the amount recorded in the previous financial year.
Vodafone said the impairments resulted from "increased discount rates as a result of increases in government bond rates together with lower cash flows within business plans, reflecting weaker country-level macro-economic environments".
Confirming the continuing impact of competitive pressure as mobile operators fight to retain hard-pressed customers, Vodafone Ireland said service revenue at its operation fell 6.2pc to €245m in the quarter of the end of March.
Ireland's largest mobile operator also revealed that blended average monthly revenue per user (ARPU) declined 10.5pc to €32.30 in the quarter to the end of March. That pace of decline was deeper than the 7.7pc year-on-year decline in blended monthly ARPU reported by the company in the final quarter of its 2010 financial year.
In the past 12 months, Vodafone said that it had cut overall prices for its Irish users by about 15pc.
The operator has 2.2 million mobile subscribers.
In the year to the end of March it also boosted its number of mobile broadband subscribers by 30pc to 173,000.