Annual revenues fell 4.4% to £44.4bn, after the firm cut prices in Europe in an attempt to retain customers.

 

In Italy service revenue fell 12.8%, while in Spain it dropped 11.5%.

 

Vodafone said it had written down the value of its businesses in Italy and Spain by a further £1.8bn, taking the total writedown for the year to £7.7bn.

 

The writedowns meant that earnings¹ after taxation² plunged³ to £673m in the group's financial year to the end of March, compared with £7bn in 2011-2012.

 

"We have faced headwinds from a combination of continued tough economic conditions, particularly in Southern Europe, and an adverse⁴ European regulatory environment," chief executive Vittorio Colao said. 

 

However, Mr Colao said he remained "very excited" about Vodafone's longer term prospects⁵.

 

Verizon Wireless⁶, the US mobile operator 45%-owned by Vodafone, was the one bright spot in the results. Vodafone received a 30.5% year-on-year rise in the profits from its stake to £6.4bn.

 

There has been speculation⁷ over whether Vodafone will sell off its stake in Verizon Wireless, worth an estimated £88bn, an amount almost equal to Vodafone's total market capitalisation.

 

However, on a conference call following the results Mr Colao said that he had "nothing new to announce" about its stake in Verizon Wireless, and added that it was a "fantastic asset".

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