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Technology Stocks : Vodafone-Airtouch (NYSE: VOD) -- Ignore unavailable to you. Want to Upgrade?

To: Jules Shear who wrote (2822)	5/30/2000 5:45:00 PM
From: MrGreenJeans	Respond to of 3175

Vodafone to benefit from generation game Dan Roberts discusses the group's mobile networks projections Published: May 30 2000 20:03GMT \| Last Updated: May 30 2000 20:09GMT Vodafone AirTouch on Tuesday gave the first indication of how much money it expects to make from third generation mobile networks during the release of better-than-expected full-year results. Ken Hydon, finance director, said that the projected rate of return on the large capital investment required for licences and infrastructure was at least 15 per cent. Although the œ6bn ($9bn) cost of Vodafone's new UK licence will be spread over its 20-year lifespan, most of the estimated œ4bn network spending and handset subsidy will be required in the first four or five years. This implies that the company is projecting potential operating profits of about œ75m above its existing performance. Vodafone described this extrapolation as "simplistic", but the rough figures give an idea of just how profitable it imagines the new services will be. The company is thought to have been forced into releasing its internal targets to counter criticism that it overpaid for the licence. The cost of running the existing UK network serving 12.4m customers is more than œ2bn a year, and Vodafone would have to find significant additional revenue streams if it is to meet its cost of capital target once the additional operating costs of the new network are added. Most of this extra money is expected to come from mobile commerce opportunities such as banking as well as higher charges for new video and internet services. Chris Gent, chief executive, also tried to calm concerns about the group's mounting debt by predicting that total borrowings would fall to about œ10bn by the end of the year. Debt was revealed at œ17.6bn, lower than expectations. Vodafone expects the cash from Orange and other disposals to reduce this before the full cost of building next generation networks is felt. "We will now be able to develop the new networks without further recourse to shareholders," Mr Gent said. These reassurances were well received by analysts, who also slightly underestimated the growth in Vodafone's existing business. On a pro forma basis underlying profits - before exceptionals and goodwill - were up from œ2.26bn to œ2.94bn in the year ended March 31, while pre-tax profits were œ1.13bn compared with œ342m losses last time. Turnover rose by 26 per cent from œ7bn to œ8.9bn pro forma following an increase from 25.4m to 39.1m in the number of its proportionate customers - the number of customers adjusted for the level of its equity investments in its international operations. These figures do not take into account the Mannesmann buy. The results also showed that existing data traffic is already boosting average revenues per user thanks to a ninefold increase in text messages sent over the period. --------------------------------------------------------------------------------

To: Jules Shear who wrote (2822)	5/30/2000 5:50:00 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 3175

Jules Don't forget the cash sale of Cetegal to Vivendi and the WAP service which will be starting soon throughout Europe. I found it interesting that messaging is exploding on Vodafone's network throughout Europe. If Ntt DoComo's I-mode is an indication of its potential Vod is on the cusp of another gold mine going forward. Remember, at this moment there is Vodafone..and all other telecommunications companies trying to play catch-up and not all that successfully. The market will recognize this going forward.