Vodafone kept the door open to a potential sale of its 45 per cent stake in Verizon Wireless of the US yesterday, as it reported a strong jump in customer numbers over the Christmas period.
The mobile phone giant pledged to review the status of its investment amid escalating calls from investors for it to divest its stake in the US network operator. Arun Sarin, the chief executive of Vodafone, said: "Given all this feedback we will re-look at this."
Standard Life, one of its top 10 investors, has publicly called for Verizon to be sold. A sale would boost Vodafone's earnings at a time when its profit margin is falling due to intense competition in its three biggest markets.
Mr Sarin warned the company would face a "substantial" tax bill of more than £2bn if it sold its stake Verizon. He defended Vodafone's decision to retain the stake over the past couple of years, pointing out it had soared in value by at least £10bn. "Why would we want to sell an appreciating asset at this point in time?" he said, adding: "This is not to say the board wouldn't, couldn't change its mind.... We're not saying we will not sell this asset in the future, we're simply saying we want to make sure that when we sell this asset we have maximised value for shareholders."
Despite the growth in revenues and customers, which beat expectations, shares in the telecoms group fell 3.25p to 117.75p as the City bet against an early sale of Verizon, which is valued at £25bn.
Vodafone reiterated that it saw its profit margin falling by about 1 per cent during its current financial year and stuck to its outlook for the following year. The cost of growing its mobile revenues by a targeted 6 to 9 per cent is hitting company profits. The group is battling against lower average spending by customers in its top markets of the UK, Germany and Italy in what Mr Sarin said was "undoubtedly one of the most difficult operating environments for the telecoms sector in recent times".
The group added a net 7.1 million customers in the three months to 31 December, as growth in Spain and the US made up for a lacklustre performance in the UK, Germany and Italy. This was a 30 per cent jump on its position the previous year. Its total customer growth was 8.3 million, taking its global customer tally to 179.3 million.
Vodafone singled out its progress in the 3G market, which it sees as an important driver of future revenues. Of its 8 million 3G devices in the market, 7.4 million are used by consumers.
At its troubled Japanese division, average revenue per user declined, but Vodafone said it had turned the corner and was increasing its share of subscribers thanks to new tariffs and better-quality 3G handsets.
3 to pay customers for talk and text
3, the mobile phone network, launched another aggressive assault on the Pay As You Go (PAYG) market yesterday, becoming the first network to reward its customers for receiving calls and texts on their phone.
Under the slogan "it pays to be popular", 3's new WePay package pledges to return 5p a minute to customers every time they receive a call, and 2p for every text they receive. The credit can either be converted into credit for outgoing calls, or used to buy music tracks or TV clips, which 3 users can listen to and watch on their handsets.
Graeme Oxby, the managing director, said the move was designed to attract high usage PAYG customers - many of whom use more than one phone and package to minimise their call charges.
3 is also offering PAYG customers £10 free credit if they transfer their existing phone number to the network.Reuse content