Vodafone hit by falling revenue per customer

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Vodafone is being hit by falling customer revenues in all its main markets with the exception of Spain, while long-term problems in Japan are taking up a "disproportionate" amount of senior management time, according to the world's biggest mobile phone operator.

Although Vodafone broke through the 150 million customer level in the final quarter of 2004, it is being dogged by concerns over average revenue per user (ARPU) figures and its turnaround plan for Japan, its biggest single market. While the company's new customer figures were relatively healthy, its main markets are fast approaching saturation point.

The company announced yesterday that the three months to 31 December were the strongest the company had experienced since 2000 for net new customer additions, with 5.5 million new customers worldwide bringing its total base to 151.8 million. But a combination of lower-spending customers and revenue cuts enforced by regulators conspired to reduce ARPU, with little prospect of a reversal in the trend.

Arun Sarin, Vodafone's chief executive, said: "If you think about penetration in our major markets, they are 80-90 per cent penetrated. We have got a number of things causing ARPUs to come down."