Mobile network giant plans to cut costs by £880m as profits fall

Mobile phone giant Vodafone expects its fullyear profits to be impacted by higher energy costs and inflation – as it plans to cut costs by £880 million.

The company said it will streamline and simplify its group-wide structure and accelerate the digitalisation of its operations.

The network will also take “pricing action” across Europe to mitigate against high energy bills and rising inflation – meaning prices could go up for customers.

Vodafone has already implemented price changes in 12 out of 13 European markets, including raising contract prices, reducing promotional discounts and linking prices to inflation.

It comes as the mobile network said its adjusted earnings dipped by 2.6% in the first half of its financial year, driven by underperformance in its largest market, Germany, and a one-off legal settlement in Italy.

It saw a modest rise in revenues, by 2%, to £20.1m, up from £19.7m in the same period last year.

The company lowered its full-year earnings guidance by £263m at the upper end of expectations as a result of the economic climate since May.

It now expects to make between £13.15bn and £13.3bn, down from £13.15bn and £13.6bn set out earlier this year.