Vodafone's mobile internet accounting stirs controversy

Concerns have been raised over Vodafone’s practice, thought to be different to that of many of its rivals, of booking wireless internet revenues, including the cut given to its third-party content partners, as turnover.

The practice complies with UK standards, but Vodafone has been criticised as its ARPU (average revenue per user) levels, seen by many investors as a key benchmark, and the measurement of the proportion of revenues it gains from data services, could be affected, even though wireless internet services only currently account for 1% of its overall takings.

Its rival Orange, which has also publicly admonished Vodafone in the past for “less stringent” methods of counting subscribers, told the Financial Times today that it does not include third-party payments in the same way and called for an industry-wide standard to be adopted.

However, a spokesperson for Vodafone this morning slammed the story as "a storm in teacup", saying that it only records third-party payments as turnover for particular services that it has developed and borne the cost, and cast doubt on whether Orange and other operators practice a different method.

Vodafone also said that payments made to third parties are then recorded as costs of sale, leaving the operator’s EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) unaffected.

A spokesperson for Orange was unavailable.





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