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Vodafone loss widens
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November 13, 2001: 3:43 a.m. ET
Largest wireless operator writes off cost of acquisitions, revenue climbs
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LONDON (CNN) - Vodafone, the world's largest mobile phone operator, said on Tuesday losses widened after writing off the value of some acquisitions.
The Newbury, England-based company, like rivals NTT DoCoMo and British Telecommunications, has been forced to write off the value of acquisitions that were bought during the telecommunications boom.
It's stock has more than halved from peak of 399 pence in March 2000, reflecting the dissatisfaction of many investors as many telecom operators built up huge debts after spending more than $100 billion on high speed mobile phone licences.
Vodafone posted a loss in the six months ended September 30 of £9.7 billion ($14 billion), or 14.41 pence a share, compared with a loss of £4.75 billion, or 8.01p a share, in the same period a year ago.
The loss includes a write off of £4.75 billion for Arcor, the German fixed-line business acquired as part of Vodafone's $200 billion acquisition of Mannesman two year ago, and Iusacell and China Mobile.
The acquisition of Mannesman was a huge coup for Vodafone Chief Executive Chris Gent, who has also moved to increase the company's stake in Japan a key market for the keenly awaited roll out of wireless email, Web and video services. Gent decided to stop buying companies and to concentrate on boosting revenue.
Proportionate earnings before interest, tax, depreciation and amortisation (EBITDA) from mobile businesses -- Vodafone's preferred benchmark including its share of subsidiaries and joint ventures -- rose 46 percent to £4.78 billion. Analysts' polled by Reuters had forecast £4.6 billion to £4.72 billion.
"This growth in all respects is better than we expected following the realignments to our strategy announced earlier this year," Chief Executive Christopher Gent said in a statement.
The company is also concentrating on increasing the percentage of lucrative non-voice revenues earned on its networks as it faces tough competition in key markets. Its average revenues per user (ARPU) stabilised in the last quarter, halting their decline.
Revenues in the six months to the end of September climbed by a third to £13.49 billion, below analyst forecasts of between £14.18 billion and £14.58 billion.
Vodafone, which operates through wholly and part-owned subsidiaries in 28 countries, said proportionate registered customers had climbed 15 percent to 95.6 million since March.
Gent said the share of revenues generated from data had climbed to around nine percent -- driven almost entirely by the huge popularity of text messaging. Data had only made up six percent of revenues one year ago.
Mobile companies are betting the text message craze will translate into heavy use of multimedia services when next generation 3G phones arrive. But lack of enthusiasm for early mobile Internet services has raised doubts about whether operators will recoup their huge investments in 3G licences.
Vodafone shares have staged a 40 percent rally from a three-year closing low of 124 pence on September 11. Its shares slipped 0.7 percent to 173 pence in early London trading on Tuesday. 
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