MOBILE phone giant Vodafone extended its cost cutting by another £1 billion today after revealing half-year results in line with its hopes.
The pledge for the period to 2012 comes after Newbury-based Vodafone achieved its original £1 billion savings target a year earlier than expected.
It reported adjusted pre-tax profits of £5.48 billion, up 3.6% in the six months to September 30, but described competition in a key growth market of India as intense and reported a 5.7% drop in revenues in the UK.
Operating profits rose 2.4% to £5.9 billion, keeping Vodafone on track for its full-year target of between £11 billion and £11.8 billion.
Chief executive Vittorio Colao said: "We have confirmed our guidance for the full year, despite the uncertainties of current economic trends."
The company said a quarter of cost savings in the current cost programme were being used to finance the roll-out of new services, such as its Vodafone 360 offer which gathers music, games, photos and video in one place.
The additional £1 billion of savings will come from utilising sourcing and scale benefits, as well as from further overhead reductions. The company did not provide details on how this might impact on job numbers.
In the UK, where the company faces intense competition, Vodafone’s operating profits fell to £75 million from £182 million a year earlier.
It said pricing pressures and the continued reduction in prepaid customers were only partially offset by higher revenues from data usage.
The recently agreed merger of T-Mobile and Orange in the UK will see Vodafone relegated from second to third place in the sector as the duo take pole position with an estimated 37% market share.
While Vodafone has targeted emerging markets in a bid to offset pressure in Europe, it warned today that competition in India would remain intense "for some time" due to a number of new entrants.
However, it added: "Economic prospects for India remain attractive and in the medium-term, in-market consolidation should improve returns. Vodafone is well positioned to benefit from the long-term opportunity in India."