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Vodafone to halve dividend payments amid scramble to upgrade network


Vodafone is to halve its dividend as the telecoms giant prepares to invest heavily in its mobile networks.

The FTSE 100 company announced a payout of 9 cents per share for 2024 but said it would slash this to 4.5 cents per share from next year “with an ambition to grow it over time”.

The company said: “The new dividend has been set at a sustainable level, which ensures appropriate cash flow cover and sufficient flexibility to invest in the business for growth.”

It came as Vodafone reported a return to revenue growth across the business in the fourth quarter as boss Margherita Della Valle’s turnaround plan starts to pay off.


The company posted a 6.3pc increase in service revenue – the amount of money made from its telecoms business – to €29.9bn (£25.7bn).

Overall revenues were down 2.5pc to €36.7bn after the sale of a stake in its towers business and the disposal of its operations in Hungary and Ghana last year.

Operating profit stood at €3.7bn, down by three-quarters from last year’s sharp increase. Shares rose as much as 3pc in early trading.

Under Ms Della Valle, Vodafone has been slimming down its European operations in a bid to return the sprawling group to growth.

Shares in the telecoms giant have slumped by more than 40pc over the last five years amid a squeeze on its margins in an increasingly competitive telecoms market.

Vodafone is close to finalising a €5bn deal to sell its Spanish business to Zegona, while it has struck an €8bn deal to sell its Italian operations to Swisscom.

The two divisions are now treated as discontinued operations and not included in Vodafone’s results. The company said it will use the proceeds of the deals to buy back up to €4bn in shares.

In the UK, Vodafone is hoping to push through its £15bn tie-up with Three. The deal has been cleared by ministers on national security grounds but is still facing an in-depth investigation by competition regulators amid fears it could push up prices for consumers.

Vodafone and Three have dismissed these concerns and argued the merger is needed to give them the scale to invest in 5G.

Vodafone also committed a further €100m to improving customer experience, including in its call centres. The company is two-thirds of the way through its plan to cut 11,000 jobs.

Vodafone last year returned to growth in its biggest market of Germany, with service revenue rising 0.2pc to €11.5bn. This was held back by a change to German TV laws that have hit its cable business. Earnings were down almost 6pc, which bosses blamed on higher energy costs and wider inflation.

In the UK, mobile service revenues rose 5.4pc, boosted by double-digit price rises earlier in the year.

Ms Della Valle said the company was seeing early benefits of its transformation plan but that “much more still needs to be done”.

She added: “We will step up investment in our customer experience, improve our underlying performance in Germany and accelerate our momentum in business, whilst also continuing to simplify our operations throughout the group. We are fundamentally transforming Vodafone for growth.”