Vodafone CEO Expects Japanese Growth From March 2006

LONDON -(Dow Jones)- Vodafone Group PLC (VOD), Europe's largest mobile phone company, Tuesday said it expects its Japanese unit to enter a growth phase next March, once its restructuring plan in the region is completed.

On a conference call of journalists, Vodafone Chief Executive Arun Sarin said: "I am confident next year we will have turned the company around."

Vodafone has suffered an alarming decline in market share in Japan over the past two years after it delayed the launch of third-generation, or 3G, services in the region. Its main competitors in Japan use a different technology to Vodafone and were able to launch new services more quickly.

Vodafone's Sarin said he expects the company to start making net customer gains toward the end of fiscal 2006.

He said the company still needs to improve its network quality, content and services during fiscal 2006. "I am confident we will do well," he said.

Sarin said the company will judge its turnaround on improving net customer gains.

He said with its market share between 16% and 17% in Japan at the end of March 2005, he expects market share to decline as much asone percentage point over fiscal 2006.

However, he expects to grow market share in the region over a two to three year period.

He added that margins and cashflow derived from Japan will decline over the next 12 months as it invests in restructuring the business and winning customers.

At 0740 GMT, Vodafone shares were 3.6%, or 5.25 pence, lower at 141.25 pence.

Company Web site: Http://www.vodafone.com

-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 24th May 2005