Earnings release for the first quarter of FY2004 ended June 30, 200426 July 2004
VODAFONE HOLDINGS ANNOUNCES FISCAL 2004 FIRST QUARTER RESULTS
TOKYO: VODAFONE HOLDINGS K.K. ("Vodafone Holdings") (TSE: 9434) today announces its results for the first three months of fiscal 2004.
Consolidated operating revenue for the first quarter of fiscal 2004 was 356.0 billion yen, marking a 21.4% decline compared to the same quarter period of fiscal 2003, due mainly to the exclusion of the fixed line telecommunication business in the second half of fiscal 2003. Total revenue for the mobile business declined by 6% compared to the same quarter period of the previous year. The full year forecast for fiscal 2004 remains unchanged, as the company's current operations are performing in line with its forecast released on 25 May 2004.
Vodafone K.K.'s operating highlights for the three-month period ended 30 June 2004 are as follows:
By the end of June 2004, Vodafone K.K.'s 3G network population coverage reached 99.6%, as expansions were made to outdoor, indoor and underground service areas. For roaming abroad on GSM networks, Vodafone K.K. had a total of 135 roaming agreements in 95 countries as of 30 June 2004. Vodafone K.K.'s 3G service saw increased subscriber growth in the period thanks to enhanced product offerings, with customers numbering 199,500 on 30 June compared to 137,700 at the end of the previous quarter ended 31 March 2004.
The percentage of prepaid customers at the end of June grew to 10% from 9% in March 2004, and from 7% in June of the previous year.
Vodafone K.K. continued to introduce innovative communication devices in the three-month period ended 30 June 2004.
Two 3G terminals were launched in April 2004. The V801SH handset enables customers to enjoy enriched Vodafone live! services both in Japan and abroad and the VC701SI Vodafone Connect Card offers high-speed internet access on PCs, PDAs and other devices for greater productivity.
The KOTO -V303T- was launched in May as the first model from a new handset design development initiative. More product offerings from this initiative are planned in order to heighten the Vodafone brand experience and enhance customers' mobile lifestyles.
5 new 2G models were announced in May 2004 for the summer 2004 season. Features include Chaku-utaR ringsong support, fun karaoke functions, enhanced 3D gaming capabilities, and TV and FM radio reception.
Whilst a trend towards ARPU decline was expected due to an increasingly competitive environment and a growing prepaid customer base, Vodafone K.K.'s ARPU for the 12-month period to 30 June 2004 declined to 78,365 yen, a 9.1% decrease compared to the same period one year ago. This was mainly due to the impact of new price plans introduced in the second half of fiscal 2003. ARPU on a monthly basis for the period was 6,300 yen in April, 6,150 yen in May, and 6,150 yen in June.
Data and content revenues accounted for 21.1% of total service revenues in June on a month only basis, and 21.9% over the past 12 months which marks an increase from 20.9% for the same period in the previous year. Although the introduction of the Happy Packet discount plan in December 2003 impacted data revenue, data revenue as a percentage of service revenue on a 12 months rolling basis has been stable.
Vodafone K.K. believes that its transformation plan is on track. A voluntary retirement programme was completed and structural changes are underway to create a more robust and agile business. Financial tools and processes are being refined to better support commercial development and decision making. In addition, Vodafone K.K. has developed a plan to strengthen its retail presence to establish closer connections to customers, and is continuing to strengthen its relationship with key channel partners.
Fiscal 2004 consolidated financial forecasts
As the operation continues to perform in line with the company's forecast released on 25 May 2004, the full year company forecast remains unchanged.
Recent corporate actions
Vodafone Group Plc recently announced that it had successfully completed tender offers for shares in Vodafone Holdings and Vodafone K.K. As a result of the public tender offer for shares in Vodafone Holdings, Vodafone Group's ownership of Vodafone Holdings is now approximately 96.08%. In accordance with Tokyo Stock Exchange rules, the delisting of Vodafone Holdings is expected to occur after 31 March 2005. Further to the announcement by Vodafone Holdings and Vodafone K.K. on 25 May 2004 regarding the merger of Vodafone K.K. and Vodafone Holdings (the "Merger"), the shareholders of both companies have approved the Merger. Accordingly, subject to regulatory approval, the Merger will become effective on 1 October 2004. Based on its current ownership in Vodafone Holdings and Vodafone K.K. (after settlement of the private tender offer for shares in Vodafone K.K.), Vodafone Group will have approximately a 97.68% interest in the merged company, to be renamed Vodafone K.K., when the Merger becomes effective.
About Vodafone Holdings K.K.
Vodafone Holdings K.K., formerly JAPAN TELECOM HOLDINGS Co., Ltd., provides mobile services through its 45.08% interest in its subsidiary Vodafone K.K. Vodafone Holdings K.K. is listed on the Tokyo Stock Exchange and the Osaka Securities Exchange, with Vodafone Group Plc holding an indirect interest of 96.08% in the company. Vodafone Holdings' other significant assets are 100% stakes in Japan System Solution Co., Ltd. and Telecom Express Co., Ltd. For more information, visit www.vodafone-holdings.co.jp
About Vodafone K.K.
Vodafone K.K., formerly J-PHONE Co., Ltd., is a leading mobile operator in Japan with over 15 million customers and a subsidiary of Vodafone Group Plc, the world's largest mobile community. The Tokyo-based company offers a wide range of sophisticated mobile voice and data services including Vodafone live!, which provides e-mail and internet access to 86% of its customers, and Sha-mail, the pioneering picture messaging service first introduced in November 2000 that now has over 12 million users. In December 2002, Vodafone K.K. launched the world's first commercial 3G W-CDMA service based on 3GPP, the international standard. Vodafone K.K.'s 3G service offers its customers fast data speeds in Japan and roaming on 135 networks in 95 countries and regions as of 30 June 2004. For more information, please visit www.vodafone.jp
This press release contains certain forward-looking statements concerning the operations and strategy of Vodafone Holdings K.K., Vodafone K.K. and their subsidiaries (collectively, "Vodafone Japan Group") and its expectations concerning its financial and operating results, in particular its fiscal 2004 performance forecasts, as well as expectations for trends in the Japanese wireless telecommunications markets and capital expenditures. By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to: changes in economic conditions that would adversely affect demand for Vodafone Japan Group's services; greater than anticipated competitive activity; slower customer growth or reduced customer retention; the impact on capital spending from investment in network capacity and the deployment of new technologies, including 3G technology; the possibility that technologies will not perform according to expectations or that vendors' performances will not meet Vodafone Japan Group's requirements; changes in projected growth rates in the wireless telecommunications industry; the accuracy of and any changes in Vodafone Japan Group's projected revenue models; future revenue contributions of data services offered by Vodafone Japan Group; Vodafone Japan Group's ability to successfully introduce new services, in particular 3G services, and the delivery and performance of key products; changes in the regulatory framework in which Vodafone Japan Group operates; and the impact of legal or other proceedings involving Vodafone Japan Group or other companies in the telecommunications industry.
All written or verbal forward-looking statements attributable to Vodafone Japan Group or persons acting on its behalf made in this press release or subsequent hereto are expressly qualified in their entirety by the factors referred to above.
- Chaku-uta® is a registered trademark of Sony Music Entertainment Inc.