The UK’s biggest mobile telecommunications company, Vodafone Group Plc, has turned an operating profit on its overseas operations for the very first time, and the group sees continued geographic diversity as the key to sustaining its growth in 1997/98. Preliminary results for the whole group show net profits for the year to March 31 up 17.4% at 363.8m pounds on revenues that rose 17.1% to 1.64bn pounds. Pre-tax profits were slightly up on market expectations and the shares rose 11 pence to 282.5 pence. There was another good year at home in the UK market where Vodafone claim to have grabbed another 415,000 subscribers, bringing their total to 2,867,000 or a claimed 40% of the market. Churn rate (a measure of the number of subscribers leaving the network by cancellation or termination) was up slightly at 27.4%. By comparison, the latest figures from Cellnet give 2,698,100 subscribers and a churn of around 25% with Orange claiming 930,000 and a churn of 18.6%. Vodafone has seen an enormous subscriber swing during the year away from its analog network. By the end of March this year, 85% of all new connections were to the new digital GSM network, with 317,000 subscribers migrating across in the year. And substantially all of the 1bn pounds spent on UK network infrastructure went on digital equipment. The success of roaming agreements, which allow GSM subscribers to use their handsets on foreign networks, has led to 24% of Vodafone’s air-time revenues coming from roaming users. In overseas markets, the group’s share of subscribers grew to a claimed 1,149,000 giving an increase of 564,000 in the year. Vodafone has substantial interests in mobile phone businesses in 13 different countries. Holdings were increased in the French, Greek and Swedish affiliates in the period, bringing an extra 106.6m pounds of revenue into the accounts. With the exception of the Greek subsidiary, Panafon SA, all foreign interests are less than 50% owned. In accounting terms they are classed as associates or investments, ensuring that the early losses and high borrowing commonly associated with fledgling mobile networks has a minimal impact on Vodafone’s figures. Vodafone will continue to increase its overseas holdings for as long as the price is right, the company said. The group also increased its shareholding in a number of its UK service providers, it now has six providers as 100% owned subsidiaries compared to the single provider (Vodac Ltd) it owned back in 1985. The proposed final dividend is 2.45 pence per share, raising the total for the year to 4.81 pence, up 20%.
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