5G roll-out will cost us
Fast roaming sees dividend cut
PENSIONERS will miss out on billions of pounds of income after Vodafone slashed its dividend payout to support its pioneering investment in 5G technology.
The telecoms giant, which has handed over £3.5billion to shareholders including pension funds in the last year, said it was slashing its payout by 40%.
It came as it posted a £6.6billion annual loss compared with a £2.8billion profit last year as it wrote down the value of assets and took a hit on the sale of Vodafone India. Revenues fell 6.2% to £37.9billion. Chief executive Nick Read said: “The group is at a key point of transformation – deepening customer engagement, accelerating digital transformation and radically simplifying our operations.
“To support these goals and to rebuild headroom, the board has made the decision to rebase the dividend.”
Vodafone announced yesterday that its 5G roaming service for consumers and business customers will go live in the UK on July 3 initially in seven cities including Bristol, Cardiff, Liverpool and Glasgow. It added that 12 other cities will go live by the end of this year.
UK boss Nick Jeffery said it will price 5G the same as 4G, with a launch of smartphones and a home router to follow soon.
Analysts focused on the dividend move that followed a similar 40% cut made by retailer Marks & Spencer in February.
Russ Mould, investment director at AJ Bell, said: “It brings to an end a two-decade streak of dividend increases from Vodafone and may lead investors to look rather nervously at some of the other income stocks in their portfolio.”
He said other potential cutters include holiday group TUI, telecoms giant BT and energy firm SSE.