 Vodafone hopes the share buyback will cheer investors |
A boost in customer numbers has helped mobile phone giant Vodafone cut its full-year losses to �5bn ($8.9bn). The firm's bottom-line loss, fuelled by charges of �15.2bn brought about by recent acquisitions, was an improvement on last year's �6.2bn loss.
On an underlying basis, Vodafone saw a 19% rise in pre-tax profits to �10bn.
The group increased its customer base by 13.7 million to 133.4 million. The UK company also announced a �3bn share buyback programme.
Japan buyout
Vodafone, which is the world's largest mobile phone company by revenue, has already spent �1.1bn on share buyback programmes since November 2003.
The company has been under pressure to release the amount of cash it returns to shareholders since bailing out of a $41bn bid for US operator AT&T Wireless, earlier this year.
Separately, Vodafone said it was planning a �2.6bn buyout of minority shareholders in its business in Japan, where it has struggled to maintain market share.
The unit - Vodafone Holdings KK - reported a net loss of 100bn yen, including a one-off charge relating to the sale of its fixed-line business Japan Telecom to a US private equity firm in November.
High expectations
Chief executive Arun Sarin described Vodafone's overall results as a "strong operational performance".
Speaking to BBC World Business Report, he said: "We are transitioning our business from a 2nd generation technology to a 3rd generation technology."
In its home market, Vodafone saw turnover rise by 18% to �4.7bn, while customer numbers rose by 6% to �14.1m.
However, despite the sales growth, margins in the UK dipped 4.4 percentage points to 33.9%, as the company increased investment to acquire and retain customers.
Mark James, an international analyst with Nomura, said: "Expectations for the group results were high, and Vodafone could not afford to disappoint. Unfortunately, we believe it has."
New 3G launch
Meanwhile, Vodafone has started selling third-generation (3G) videophones in two of its key markets in Spain and Italy.
The phones feature advanced video clip services, improved ringtones and fresh content, the group said.
A limited launch of 3G phones took place in Germany and Portugal earlier in the month.
It has already launched 3G phones in Japan but with limited success, securing less than 1% of the 3G market.
Vodafone said it plans a full commercial launch in Europe in the autumn when "millions" of handsets will be in the shops
Shares in Vodafone were down 6.75 pence, or 5%, at 128.75 pence on the London Stock Exchange at the close of trade.
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