Vodafone, the mobile phone group, is set to signal on Tuesday that it plans to improve revenue growth by extracting better performance from existing assets rather than embarking on another acquisition spree.

While announcing annual results that may show a record pre-tax loss for a UK company, Vodafone is expected to reassure investors that it is not looking to revive slowing revenue growth by buying more mobile operators in emerging markets.

Instead, Vodafone is seeking to improve the performance of existing assets by cutting costs and developing strategies to increase customers’ use of mobiles.

Vodafone was built into the world’s biggest mobile phone operator by revenue by a series of large deals such as the £101bn acquisition of Germany’s Mannesman in 2000.

Arun Sarin, Vodafone’s chief executive since 2003, last year pursued the acquisition culture of his predecessor by buying mobile operators in the Czech Republic, Romania and Turkey.

But people close to Vodafone said the pace of deals would slow and that future activity was likely to be focused on increasing shareholdings in companies in which it already has minority stakes. “Expectations on acquisitions are more modest,” said one person close to the company.

For example, Vodafone last year bought a 10 per cent stake in Bharti, India’s biggest mobile operator, and would be interested in increasing it.

Vodafone had already rattled investors in November by warning that revenue growth
would be lower in 2007 than in 2006.

It cut its 2007 growth forecast again in February. On Tuesday, Vodafone will outline plans to increase customers’ use of mobiles in its core European markets by offering lower tariffs inside homes.

Mr Sarin is also expected to promise better performance by cutting costs.

Vodafone is considering outsourcing some of its information technology functions
and organising supply-chain management at group level rather than in its operating

Vodafone’s annual results for 2006 may show it reporting a bigger pre-tax loss than the £13.5bn recorded in 2002 because of a write-down in the value of its assets.

The goodwill write-down of up to £28bn, announced in February, relates primarily to the acquisition of Mannesman.

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