Vodafone says no to 3G licence write down

22 May 2003

Mobile giant Vodafone has said it will not be writing down the value of its European 3G licences, despite yesterday’s decision by rival mmO2 to write off GBP5.9 billion of its own concessions. Analysts predicted the move by mmO2 would put pressure on the other top European cellcos to write down their 3G investments, but Vodafone said that the GBP14 billion it spent on 3G licences – which includes GBP6 billion in the UK alone – still represents good value for money. mmO2, which wrote off GBP2.1 billion from its GBP4 billion UK licence and GBP3.8 billion from its GBP15.1 billion German concession yesterday, claims that the industry as a whole paid far too much for the licences, but Vodafone has not been as quick to admit that its money has been wasted. Its reasoning is somewhat justified, however, with its UK operation expecting to report an operating profit of GBP1 billion this year compared with O2 UK’s GBP359 million.

United Kingdom