Vodafone Group Plc, the UK’s biggest mobile phone network operator, has fired the first shots in what could become a UK price war, and the shares fell as the stock market feared the worst. Vodafone showed stronger than expected results at the interim stage with net profits to September 30th up 10.2% at 191.1m pounds on revenue that rose 50.9% to 1.16bn pounds. But the shares fell 15.5 pence to 341.5 pence on the news that call tariffs are to be slashed by as much as 15% with Vodafone starting to turn the screw on its competitors. Shares in the UK ‘s third biggest mobile operator, Orange Plc, fell 9 pence to 242 pence as analysts began to fear a loss in margins across the industry. The announcement of a new tariff led assault on the market comes after a 19m pound reorganization which is intended to simplify the company’s structure and create a new corporate identity. Vodafone has set aside a further 15m pounds for advertising in the run up to Christmas and chief executive Chris Gent said his company was upping the ante in search of greater market share, currently estimated at 39%. The company claimed a total of 4.6 million subscribers worldwide at the end of September, with UK subscribers pushing past the three million mark. Revenue in the UK was up by 31% in the six months to 867m pounds while revenue from international operations grew 175% to 297m pounds. Vodafone’s biggest competitor in the UK, Cellnet Mobile Communications Ltd, said it currently had no plans to adjust its prices downward, but a reduction couldn’t be ruled out if subscriber numbers fell. The interim dividend increased by 15% to 2.71p per share.
