Vodafone to slash costs as customers cut usage
Newly appointed Vodafone chief executive Vittorio Colao has also cut the group's full-year sales forecast. Photo: Bloomberg News
Vodafone is set to slash its costs by £1bn (€1.23bn) in an effort to protect its earnings as embattled consumers curb usage of their mobile phones.
It was unclear yesterday what implications this could have for the group's Irish operation, which employs almost 1,300 people in Dublin.
It also emerged yesterday that Perlico founder Iain MacDonald, who sold the group to Vodafone last year for up to €80m, is to step down from the company. He'll be replaced by Paul Woods.
Mr MacDonald owned 20pc of Perlico, which was backed by Michael Smurfit and technology entrepreneur Jim Mountjoy. Vodafone paid €32m in cash for Perlico with the remaining €48m payment being subject to performance. It's understood that former Perlico shareholders have received some additional payments.
Newly appointed Vodafone chief executive Vittorio Colao has also cut the group's full-year sales forecast for the second time in four months, while keeping its profit forecast. It expects to report an adjusted operating profit of between £11bn (€13.5bn) and £11.5bn (€14.1bn) for the full year.
The Vodafone group said first-half revenue rose 17pc to £19.9bn (€24.4bn) and it generated a 10.3pc rise in earnings before interest, tax, depreciation and amortisation to £7.2bn (€8.8bn).
The company continued to see its Irish customer base marginally eroded in the three months to the end of September, although average revenue per user recovered compared to the previous period.
Loss
The company has lost 16,000 customers in the quarter to the end of September, compounding a loss of 17,000 subscribers in the previous quarter. It now has a total mobile customer base of 2.23m in Ireland. That's marginally higher than the 2.21m subscribers the operator had here at the end of September 2007, after adding 30,000 customers during the three months to that date.
However, Vodafone's fixed-line and DSL broadband businesses added a further 76,621 customers bringing Vodafone Ireland's total customer base here to 2.31m at the end of September.
Aside from owning Perlico, the group also offers its own branded home telephony and internet service. About 94,000 customers in Ireland are also using Vodafone's mobile broadband product.
Vodafone's average revenue per user in Ireland, a key indicator for mobile operators, rose quarter-on-quarter to €42.50 per month from €41.70.
- John Mulligan
