Vodafone suffers record loss
- Added:
- May 30, 2006
The losses were largely attributed to a writing down the value of assets in Germany and Italy.
The network incurred one-off costs of more than £23.5bn after revaluing its German business Mannesmann, which it bought in 2000 for £112bn.
Vodafone said it would also cut 400 jobs in an effort to reduce costs.
Excluding one-off costs, Vodafone made a £8.8bn profit. The company also added 21 million new customers during 2005.
However, Vodafone's losses would total £21.8bn ($41bn) if the loss in value of its Japanese subsidiary Softbank, which it sold in March, were included.
The company admitted it is facing increasing challenges from rival mobile operators as they seek to counter declining revenues from voice services by moving into new areas such as fixed line offerings and mobile TV.
Commenting on the results, Arun Sarin, Vodafone chief executive, said: "We are seeing changes to the competitive landscape as not only incumbent operators are seeking to offer fixed mobile convergence, but also new internet based players are seeking to expand their communications offerings."
The company is entering new markets such as the Czech Republic, Romania, India, South Africa and Turkey, and cutting costs.
Vodafone said it is planning to offer voice with broadband data packages similar to BT. The company will offer a "homezone" tariff that lets mobile customers switch to low-cost calls if they are near home.