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Will Vodafone's new strategy pay off?

Tuesday, November 11, 2014 - 01:51

The world's second-biggest mobile operator Vodafone, has nudged its full-year earnings forecast higher. As Hayley Platt reports it's largely thanks to improving demand in its big European markets and an investment push into new products.

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Already the world's second-biggest mobile phone operator. Britain's Vodafone now plans to offer broadband and TV services to UK homes as well. The news helped shares top 5 percent, making it one of the top gainers in the FTSE 100. deVere Group's Tom Elliott. SOUNDBITE: Tom Elliott, International strategist, deVere Group, saying (English): "Anything that broadens its revenue based is encouraging especially when you consider some of the high margins on offer from that particular activity delivering broadband to homes. Anybody with experience of paying the bills from a UK broadband deliverer will suspect that there is still a lot of profit to go for." Business in its biggest market, Europe, picked up in the second quarter. That helped the company beat revenue forecasts and raise its outlook. Vodafone says its 19 billion pound investment programme, to develop new services, is well under way. It wants to compete with rivals already offering mobile contracts alongside television, broadband and fixed-line deals. Reuters reporter Kate Holton was at Vodafone's news conference. SOUNDBITE: Kate Holton, Reuters UK reporter, saying (English): "Customers like being able to take multiple services from one provider. So what they've said that they're doing is that they're doing this as a defensive play to prevent their customers from going to BT or from going to Sky or Virgin. It's not necessarily designed to shake up the market and create a price war." Less than a year after selling off its stake in U.S. firm Verizon most analysts seem happy with Vodafone's progress . Only 6 percent of European customers are currently on 4G and Vodafone's investment programme has barely begun. It now expects its full-year core earnings to be at least 11.6 billion pounds - slightly up on previous forecasts. It's also increased its interim dividend by 2 percent.

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Will Vodafone's new strategy pay off?

Tuesday, November 11, 2014 - 01:51