LONDON (Dow Jones) - Vodafone Group on Monday said it will slash as much as $ 49 billion in goodwill due to slowing growth in Germany and other top markets.

Vodafone, (VOD) in a review of its accounting due to the adoption of international accounting rules, said it now expects to write down 23 billion pounds to 28 billion pounds ( $49 billion ) of assets, mostly on the goodwill it took on from its 110-billion-pound acquisition of Germany's Mannesmann in 2000.

Goodwill is the value of a company beyond its assets - such as brand names or employee morale - that should translate into better earnings growth.

With profit warnings in the past half year not only from Vodafone but telecom peers Deutsche Telekom (DT) and France Telecom, (FTE) the company's management said it needs to factor an increasingly competitive market into its accounting model.

Vodafone's London -listed sharesdropped 4.1%.

The Vodafone news weighed on the wider sector.

France Telecom slipped 1.5% in Paris, Telecom Italia (TI) declined 1% in Milan and Deutsche Telekom declined 1.3% in Frankfurt .

Vodafone also issued a profit warning for the fiscal year ending March 31, 2007, though it's excluding the impact of recent deals in Turkey , South Africa , India and Sweden .

While adjusted earnings per share are expected in line with market estimates, Vodafone said that comparable-sales growth - or organic proportionate mobile revenue growth, in its words - will grow at a 5% to 6.5% clip.

It also said that operating margins outside of Japan should shrink around 1% on a comparable basis, because of pricing pressures, additional investments in customers and forced changes in termination rates, the fees mobile operators charge other carriers to use their networks. (END) Dow Jones Newswires 02-27-06 0500ET Copyright (c) 2006 Dow Jones & Company, Inc.