Mobile phone giant Vodafone slumped to a half-year loss today as it counted the cost of economic woes in Italy and Spain.
As well as writing down the value of its operations in the two struggling countries by nearly £6 billion, Vodafone was impacted by the competitive UK market as rivals fight for business with new unlimited tariffs.
Revenues in the UK were down by 2.1% and underlying profits fell by nearly a third as the higher cost of retaining smartphone customers also hit home.
Across the group, half-year revenues were down 7.9% - driven by an 18% slump in southern Europe - and bottom-line losses were £492 million against pre-tax profits of £8 billion a year earlier.
Shares were 3% lower today, despite the company announcing a £2.4 billion dividend from US joint venture Verizon Wireless, of which £1.5 billion will be returned to shareholders.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: "The wider market has held concerns over southern Europe for some time now, and these numbers from Vodafone are uncomfortable proof that the financial fears are well-founded."
