Vodafone to slash £2 billion in costs by 2012

Paul Nesbitt

Vodafone has announced plans to double its £1 billion cost-cutting plan in response to what it describes as 'intense competition'.

The world's largest mobile network may have announced a 73% rise in first half pre-tax profits to reach £5.7 billion on revenues of £21.8 billion (up 7%), but the company claimed it is feeling the heat.

Notably, sales in its home territory of the UK fell by 5.7%. This is widely attributed to the fact that O2's exclusive rights to the iPhone had enabled it to syphon away high spending customers from Vodafone.

But with O2's exclusive hold on the iPhone ended, Vodafone will follow Orange, which launched its own iPhone package earlier this month, and offer Apple's hot handset to its UK customers. Vodafone will start to sell the iPhone before Christmas.

Vodafone's cost cutting drive has already seen the company eliminate 500 jobs in the UK.