Earnings release for the FY2003 ended March 31, 2004 - 3
Consolidated costs and expense
Consolidated operating costs and expenses at Vodafone Holdings totaled 1,470.6 billion yen for fiscal 2003, a decline of 50.7 billion yen compared to fiscal 2002. As Japan Telecom's results were only consolidated for the first half, operating expenses included in the consolidated statements dropped 157.4billion yen. Vodafone K.K.'s operating expenditures totaled 1,325.9 billion yen, an 108.6 billion increase from the previous fiscal year, due to an increase in 3G equipment depreciation, a provision for slow moving handsets, an increase in customer retention costs and incremental costs related to operating the 3G network. These rises were partly offset by savings resulting from lower new customer incentives due to fewer new subscribers, and successful 9-into-1 synergies such as the newly integrated East Japan customer centre.
Consolidated operating income decreased by 90.6 billion yen to 185.0 billion yen.
Consolidated capital expenditures
Consolidated capital expenditures at Vodafone Holdings totaled 253.1 billion yen in fiscal 2003 on a fixed asset addition basis, a decrease of 26.2 billion yen compared to fiscal 2002. On a cash flow basis, capital expenditures decreased by 107.1 billion yen to total 248.6 billion yen.
Vodafone K.K.'s capital expenditures reached 260.8 billion yen for fiscal 2003 on a fixed asset addition basis, a decrease of 0.9% compared to the previous fiscal year. On a cash flow basis, expenditures were 252.9 billion yen. Notably, Vodafone K.K. expanded its 3G network with approximately 13,500 cumulative 3G base stations and achieved 99.5% network population coverage at the end of March 2004 while effectively leveraging Vodafone Group's global scale and scope for joint equipment purchasing.