Vodafone, the world’s largest mobile phone company, is planning to reduce costs by £1bn after being forced to cut its revenue forecast for next year. The plan is expected to lead to job cuts across the mobile operator.
The company has cut revenue forecasts to between £38.8bn and £39.7bn for the next calendar year, as it comes in under pressure in mature European markets. Service revenues fell 1.1% in the first half of the year, while UK performance slowed in the second quarter compared with the previous three months.
The group wide cost-cutting measures will be put in place until 2011 is likely to lead to job cuts. The downgrading of revenue growth for the 12 months to the end of December is the second time the company has cut its forecast. In July it said that it expected full-year revenues to be in the range of £39.9bn to £40.7bn.
Vodafone chief executive, Vittoria Colao, has also signalled that major acquisitions will not be on its agenda. Instead, it will focus on increasing business with existing customers, particularly in the business sector.
The company says: “Operating conditions are expected to continue to be challenging in Europe given ongoing competitive and regulatory pressures and recent economic conditions in certain markets.”