The main reason for the company’s continued success is not continued success of existing business but the performance of newly acquired Germany’s Mannesmann, and the formation of Verizon Wireless in the US.
These successful takeovers by the company will however be the last for the present, as the company strafed that it wished to concentrate on improving profit margins rather than global expansion.
Many of the acquisitions were processed through the issue of new equity, resulting in a significant proportion of shareholders who are not seen as long-term investors. This creates a constant selling pressure.
Vodafone’s earnings before interest, taxation, depreciation and amortisation were at 7 billion, compared to 5.5 billion last year.
When exceptional items – like the purchase of Mannesmann – are taken into account, the company made a pre-tax loss of GBP8.1billion, compared to a profit of GBP1.3 billion last year.
As a result of the expansion programme, Vodafone’s registered customers jumped by more than half.
The news was not enough to stop the company’s shares from sliding on the financial markets.
Within the UK the company reported a market share of 28%, remaining number one, boasting a million more customers than its nearest rival.
By the company’s analysis, the leading growth factor in the UK mobile market were pre-pay products. Accounting for almost eight million customers at the end of March – around 65% of Vodafone’s UK customer base.
With heavy burdens through the amounts paid for third generation licenses Vodafone is set to launch General Packet Radio Services (GPRS), with 3G to follow by the end of 2002 or early 2003, initially aimed at the business market.
This initial rollout will be cemented by a further 10 billion in spending over the next five years.
