Vodafone shares rallied strongly yesterday after the mobile phone giant said that its UK operations had regained momentum.
Unveiling growth in first quarter overall revenues of 8.6 per cent, Vodafone said the UK business, which has faced strong competition, had increased total customer numbers by 8.9 per cent, or 165,000 to 15.5 million.
It said a fall in the key industry measure of average revenue per user (ARPU) to £300 from £306 in the year to June against the year to March "substantially offset" that growth, resulting in a service revenue increase of 0.6 per cent for the quarter in the UK.
It said non-voice service revenues increased by 11.9 per cent year-on-year.
The firm said it notched up group organic growth of 8.6 per cent in mobile revenues during the quarter and more than 4.1 million extra customers - its best growth in five years and 35 per cent higher than in the same period last year.
Chief executive Arun Sarin said the company was reiterating its guidance for the year to March 2006.
"We have seen strong performances across Europe and in the US and we continue to focus on improving our business in Japan," he said.
Shares in Vodafone, the world's largest mobile phone company in terms of revenue, touched fresh year highs of 147-1/2 pence before settling 1.6 per cent higher.
Analysts welcomed the figures, even Mark James, telecoms analyst at Nomura, who rates the stock a 'sell', said, "KPI (Key Performance Indicators) released today still look better than expectations and we expect them to be well received."
In Mr Sarin's most pragmatic comments yet on his struggling business in Japan - third-ranked Vodafone K.K. - he noted that Vodafone was "not married" to any of its assets, although he said his priority remained to fix the business.
While Japan remained a good market with significant-innovations in areas such as mobile television or camera phones, Mr Sarin said that if something changed in the future, he would " obviously be looking at this with an open mind".
"We're doing and seeing things in Japan that are very advantageous to our position here in Europe," he said, adding: "We're not married to any asset."
Mr Sarin also reiterated that he remained keen on clinching a majority stake in Poland's third-largest mobile phone company Polkomtel alone, despite Polish newspaper speculation that the company had made a joint bid to increase its 19.6 per cent stake with Danish coshareholder TDC.
"TDC is a partner and when we have approached our Polish shareholders in the past, or when we approach our Polish shareholders in the future, chances are that we are likely to do it together," he said.
Asked whether his preference remained to own a majority stake in the fastgrowing business solely, he said: "That is our vision."
But he added that it was too soon to talk of any progress in talks. "I cannot really suggest to you or tell you whether we're any further along in the process."
Mr Sarin also said there was nothing imminent to report in Germany, where Vodafone still owns non-core, fixed-line telecoms business Arcor, which is being eyed by potential bidders such as private-equity houses.