Vodafone reports hefty loss after hit from Indian unit

Vodafone has reported an annual loss of 6.1bn euros (£5.2bn), due partly to a big write-down in the value of its Indian business.

The mobile phone giant, which operates in 26 countries, wrote down the value of its Indian unit by 3.7bn euros after a major price war broke out last year.

Vodafone also admitted it had suffered a disappointing year in the UK.

Chief executive Vittorio Colao said a £4.6m fine from Ofcom was "the worst moment" for the firm and its customers.

The fine was imposed due to "serious breaches" of consumer protection rules, which led to customers losing money.

The problems were caused by errors linked to the company's move to a new billing system.

Mr Colao said on Tuesday: "The operational issues are essentially resolved. I don't call it rock bottom.

"The worst moment was six months ago. Six to nine months ago we were receiving twice the number of complaints. I was personally receiving complaints."

In the past 12 months, Vodafone lost 300,000 UK customers, with 17.9 million remaining, although its broadband business grew to 216,000 households.

But Mr Colao insisted that customer services had undergone major changes.

The company has hired 2,100 new workers to help reduce customer service call answering times to 14 seconds, and it revealed complaints have fallen by 1.1 million since November 2015 - a 40% drop.

Vodafone also said that it had abandoned plans to sponsor the London Stadium, home to West Ham United.

It had been linked with a £20m deal for six years, according to the Times, but this broke down and will not go ahead.

Sterling impact

Despite Vodafone reporting the hefty loss, its shares rose 3.7% to 219p as investors appeared impressed with the company's forecasts.

Mr Colao said earnings were expected to grow, thanks to average revenues from contract customers stabilising.

Cash flow is ahead of analysts' expectations, although organic service revenues growth slowed to 1.5% in the final quarter of the year from 2.1% in the third.

The UK was one of the operator's worst performing markets last year, with revenues dropping 17% and profits down 31% due to the weak pound.

By comparison, its Italian business was the best performing in Europe, with revenues rising 2.6% and profits up 10.6%.

On Brexit, Mr Colao said he had no plans to follow other multinational UK-based businesses in moving some operations overseas.

He added: "Brexit for us does not have a big impact. If, as a consequence of Brexit, business slows down then our customers will not be in a good shape.

"It depends on the negotiations, but I'm an optimist and as long as leaders are pragmatic. It makes no sense for anyone not to get a good deal."