Vodafone clocks up healthy quarter but ARPU flat

Vodafone's results, out today, show the world's largest mobile operator beating predictions – and planning a £2.5bn share buyback scheme.

Group revenues were around £17bn for the six months ending 30 Septmber – up 13 per cent on last year – while EBITDA (earnings before interest, taxes, depreciation and amortisation) profit also rose, growing by 26 per cent to £5.4bn.

The all-important metric of ARPU – average revenue per user – paints a stable picture of the company, with spending up slightly in the UK by 1.7 per cent, remaining largely stable in Germany and falling in Japan.

Julian Hewett, chief analyst at Ovum, said that he doesn't foresee things changing in the near future: "ARPU will remain flat despite the supposed success of Vodafone live! and the 3G launch next year. The best they can hope for is that increasing wireless data use will make up for the loss in voice", he said.

Customer numbers, however, were on the rise, with the operator adding an extra 3.2m scalps to its tally in the last quarter alone.

In a move that will please its cash-hungry investors, the giant announced its intention to buy back £2.5bn worth of shares, as well as increasing its dividend. It's expected that the buyback will be completed within a year.

Unlike declarations from other telcos - who have introduced a note of caution into their results - Vodafone CEO Arun Sarin said in a statement he believes Vodafone is on a secure footing for future profitability. "I am confident that Vodafone is strategically, operationally and financially well-positioned to deliver continued success in the future", he said.

However, the company does not expect to turn in the same performance for the upcoming half year.

While it expects its margin for the six months ending 31 March 2004 to be ahead of the corresponding period last year, it doesn't believe it will reach the levels it achieved in the preceding six months, due to stiff Christmas competition.

Also with an eye on the future, COO Julian Horn-Smith described the company as entering "the exciting period of transition to 3G networks in a number of markets over the next 12 months".