Telecoms price hike
British telecoms company Vodafone has announced plans to raise prices for its services to cope with rising electricity prices and high inflation. The announcement was made on Tuesday by Nick Read, managing director of one of the world's largest mobile operators.
The company said it would take "pricing action" across Europe to mitigate high energy bills and rising inflation, meaning prices for customers could rise.
However, Vodafone has already changed prices in 12 of its 13 European markets, including raising contract prices, cutting advertising discounts and linking prices to inflation.
The mobile operator said the deteriorating global macroeconomic climate, rising energy prices and rising inflation had affected its financial performance.
The operator's shares fell more than 7% on Tuesday morning after the company adjusted its profit forecast to €15-15.2bn from €15-15.5bn and lowered its free cash flow forecast to €5.1bn from €5.3bn.
Revenue rose 2% to €22.9bn, but adjusted profit before interest, tax, depreciation and amortisation fell 2.5% to €7.2bn due to poor commercial performance in Germany's biggest market and a one-off legal battle in Italy.
Nick Read said: "We are experiencing a significant negative impact from electricity prices and inflation. Price is a key component of what we do, as in any other area. We are talking about an increase of £1 to £2 per bill." In his view, compared to how much mortgage payments or car petrol bills have gone up, it's not that much of a difference.
It is worth noting that in April 2022 Vodafone raised prices in line with the annual consumer price index, plus 3.9% in the UK market.
Vodafone said it was aware of the financial difficulties faced by its customers and had introduced a cost-of-living plan to help people.
It includes social or low-cost tariffs, additional customer and business support measures and helping customers reduce their energy consumption.
Also, the telecommunications company reported an increase in revenue of more than 7% to €3.4bn.