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Vodafone may devalue 3G assets

January 12, 2004

Global mobile service provider Vodafone will depreciate the value of its assets by £13 billion as a results of delays in its 3G service launch, according to The Business weekly newspaper.

The newspaper said financial sources fear the investments used to acquire licenses would weigh heavily on the value of Vodafone shares in the next few months.

"Vodafone should be careful what it wishes for, as when it finally launches 3G later this year, the amortisation of its £13 billion licence costs will start to kick in for real," Mark James, Nomura telecoms analyst told The Business.

The British based operator had planned to launch 3G in 2002 but technical problems and an uncertain market meant the company delaying the launch in the UK until probably the second half of this year.

The Business said Vodafone has invested the hugely in licenses and network infrastructure but "there are mounting fears among investors that the bet will not pay off".

Vodafone Australia said it remains on track to launch 3G, sometime in the next two years and would not be affected by incidences in Britain. "Basically, the UK and parts of Europe are rolling out the first phase of 3G," said a spokeswoman.

 


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