Jeremy Warner: Steady as she goes at Vodafone

Outlook As everyone around is cutting dividend payouts, Vodafone trundles on regardless. The company cannot claim to be entirely recession-proof. Some of its markets have been badly hit by the downturn, most notably Spain. Roaming revenues and business traffic are also under pressure. But in the round, the mobile phone seems to be one of those things that, however bad things get, people are not prepared to do without. What is more, certain elements of mobile telephony, such as data, continue to display growth company characteristics. At Vodafone, mobile date grew by 26 per cent last year in money terms. Nor is this just some flash-in-the-pan insignificance. In some maturer markets, data is now a meaningful proportion of overall revenues.

Even in markets which are under pressure, margins remain mouth-wateringly high. Spain may be deep in the doldrums but, for Vodafone, it is still strongly cash generative with margins of 30 per cent. Meanwhile, the group as a whole continues to throw off cash like it was going out of fashion. The biggest threat to these profits appear to be regulatory. BT, in conjunction with 3, the smallest of the UK mobile operators, is today planning to launch a new campaign to persuade Ofcom to limit mobile termination rates. The European Commission also has its beady eye on what it regards as usurious charges.

Regulatory action makes margin erosion inevitable, which is why Vodafone is accelerating its £1bn cost-cutting programme and considering adding more. All the same, there seems little danger of Vittorio Colao, the chief executive, having to abandon his "progressive dividend policy", and no danger whatsoever of a dividend cut. The buy-back programme, on the other hand, does seem to have gone, leaving something in the kitty for spectrum and other asset purchases. Mr Colao is nearly a year into the job. Thus far, investors have little to complain about.