Vodafone hits 2-year low in UK sign-ups

Vodafone, operator of the world's biggest mobile phone network, yesterday revealed that customer growth had slowed sharply in the second quarter after its decision to focus on profits rather than market share.

The company signed up 3 million net new customers worldwide in the three months to June, compared with growth of 4.4 million in the previous quarter. It now has 93.1 million global users on its networks.

In the UK, Vodafone revealed that customer growth contracted to its slowest for two years. It added just 269,000 people to its network during the quarter, taking the total to 12.5 million. In the first quarter it signed up 620,000 net new users. About 44 per cent of the new signings were contract customers, compared with 26 per cent in the first quarter.

Analysts had expected the global slowdown because the market for handsets is nearing saturation, but they said the figure was still towards the lower end of their forecasts. Many potential customers have been put off buying new phones, as the networks have reduced the subsidies they were paying on handsets as a way of persuading consumers to sign up. Vodafone has also shifted its focus away from pay-as-you-go customers to woo more high-margin contract customers.

Sir Christopher Gent, the chief executive who was knighted in the Queen's birthday honours last month, said increas- ing the proportion of new contract customers, compared with those on pay-as-you-go, had been "one of the objectives we had in the change of our commercial policies."

Shares in Vodafone fell 2.25p to 155.25p.