Shares in Vodafone rose more than five per cent in mid-morning trading, despite the fact figures it published today showed pre-tax profits collapsed 73 per cent to £406m in the six months ended 30 September. However, forecasts for core earnings were raised.
Basic earnings per share took a heavy hit, falling almost 70 per cent. Organic service revenue was weaker, falling 2.8 per cent to £19.1bn but was not as bad as expected. The FTSE 100 company said its £19bn investment programme was bearing fruit with wider 3G and 4G data coverage.
The company said customers were trading up for bigger data allowances thanks to their increasing familiarity with 4G.
Vittorio Colao, group chief executive, commented:
Our markets continue to be highly competitive, and regulatory and macroeconomic risks remain. However, we are not yet half way through our investment programme, and there is still much more we will do to build a differentiated service for customers and improve perception.
Just six per cent of Vodafone's customers in Europe are using 4G. Last month Vodafone launched a probe to investigate an allegation of fraud at Ono, the Spanish cable company which the mobile phone giant took over in July this year.
The allegation relates to a possible tax fraud in part of Ono’s business, which could have over-inflated the company’s profits ahead of the takeover deal, which was worth £6bn.