Vodafone warns on revenue

Vodafone today cut its revenue outlook, knocking confidence in the telecoms sector.

The world's biggest mobile group by sales was hit by consumers delaying buying new phones, sending its shares to a 20-month low and wiping about £10 billion off its market value.

"We are beginning to see an impact from the current economic environment which is greater than we expected," outgoing Vodafone chief executive Arun Sarin told investors and analysts on a conference call.

Collins Stewart analyst Mark James said telecoms companies had shown remarkable resilience to date to the macro-economic slowdown, but Vodafone had kicked off the telecoms results season with a reminder that nobody was immune.

"This shatters the widespread perception that Vodafone will be defensive in a weakening economy," Investec analyst Jonathan Groocock said. "The Spanish and UK telecoms markets, resilient to the economic slowdown to date, finally look to have cracked."

Vodafone left its capital expenditure plans unchanged for now, but indicated it had no urgent need to expand network capacity in response to higher demand for third-generation services such as video or Internet browsing.

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