Sarin: Upbeat

London, Jan. 24 (Reuters): Cell phone giant Vodafone beat forecasts for customer and revenue growth on Tuesday helped by emerging markets and sales of new 3G phones, but disappointed some investors by saying it would keep its US business.

The world’s biggest mobile operator by sales, under pressure from some investors to sell its 45-per cent stake in US firm Verizon Wireless and return proceeds to shareholders, warned that the competitive pressure it was facing would not ease soon.

Chief executive Arun Sarin said Vodafone was facing “undoubtedly one of the most difficult operating environments for the telecom sector in recent times”.

“We see this more intense environment continuing over the next 6, 12, 18 months,” he told analysts on a conference call.

Vodafone, however, kept its guidance for this financial year and its outlook for the next, and said it was making progress in selling 3G phones that enable video calling and faster Internet access and bring it higher revenues.

It added a net 7.1 million customers in the third quarter of its financial year, spanning the key Christmas period, as growth in emerging markets, Spain and the United States offset stiff competition in the UK, Germany and Italy.

“We’re encouraged by the fact that although Italy and Germany are worse than expectations, that impact is more than offset by the US and the emerging markets,” said Jim Wright, fund manager at the British Steel pension fund.

He said the firm was right to keep its Verizon stake for now. “It’s a fantastic asset and I wouldn’t want them to sell it for anything other than a very, very high price,” he said.

Vodafone shares rallied as much as 2.9 per cent in early trade, adding to gains on Monday. But later they had reversed to trade down 2.5 per cent at 119 pence.

“A lot of people bought them on the pretence Vodafone could sell their Verizon stake, and when there was nothing on America, they flushed them out,” one dealer said.