Vodafone to step up cost cutting plans
Telecoms giant Vodafone yesterday posted a 73 per cent jump in first-half pre-tax profit and doubled its cost-cutting target to £2bn.
The world’s largest mobile operator, which saw revenues increase on sales of data services, had already said it would reach its £1bn cost cutting target by March 2010, a year ahead of schedule. But it now intends to save a further £1bn by March 2012.
Vodafone chief executive Vittorio Colao did not rule out job losses at the group, which has already cut 500 of its UK staff, but said that headcount was not the focus of the cuts.
The news came as Vodafone posted a pre-tax profit of £5.7m in the first half, on revenues that were up 9.3 per cent to £21.8bn. Strong growth in emerging markets, such as India and South Africa, offset a 4.5 per cent drop in revenue in Europe.
Vodafone’s UK operation saw a 5.7 per cent dip in revenues, as it lost customers to O2, which until recently had exclusive rights to sell the iPhone.
Colao reiterated guidance for full-year operating profit of up to £11.8bn, and emphasised the group’s strategy of growing revenues from its data services, such as mobile access to the internet.
“To determine and retain these customers is the most important thing we can do,” he said, though he would not be drawn on the firm’s pricing strategy for the iPhone, which it will start to sell after Christmas.