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Vodafone boosted by smartphone popularity
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Vodafone, the world's largest mobile phone network operator, on Friday confirmed its financial outlook for the year, helped by the growing popularity of services for mobile phones such as Apple's iPhone and strong demand in emerging markets such as India and Turkey.

The company also announced an agreement to pay the UK government £1.25bn over the next five years to settle a long-running dispute over the tax on one of its foreign subsidiaries.


Ahead of its annual meeting next week, Vodafone said revenue for the first quarter to June 30 rose 4.8% to £11.3bn. Turnover fromservices , such as access to the internet, rose 1.1 per cent year-on-year and improved 170 basis points quarter-on-quarter on the back of demand in Germany and the UK.

The Vodafone board is fighting off increasing complaints from investors that the company's market capitalisation does not match up with analysts' sum-of-the-parts valuations.

"We have achieved these results through our continuing commercial approach in key European markets, focusing especially on data and from strong growth inemerging markets , with India now cash positive at an operating level and our highest ever quarterly revenue in Turkey," said Vittorio Colao, chief executive.

Earlier this week the Ontario Teachers' Pension Plan, which has a 0.42% stake in Vodafone, called for a board shake-up because of concerns about the mobile operator's "strategic weaknesses" and "disastrous" acquisition record.

On an organic basis, turnover in Europe rose 0.7% quarter-on-quarter but was down 1.7% year-on-year.

Vodafone said it would pay £800m in the current financial year to settle the tax case, which dates back to Vodafone's 2001 tax return, with the remaining £450m to be paid in instalments over the next five years.

In 2008 the high court ruled that it would be unlawful to apply UK rates of corporation tax to a subsidiary based in Luxembourg. The Treasury had been confronting multinationals over their ability to shift profits to lower-tax jurisdictions. Its desire to tighten anti-avoidance rules prompted threats by several large companies to move their tax domicile overseas.

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