Vodafone 'may have to cut acquisition values'

Mobile phone giant Vodafone may be forced to slash the value of recent acquisitions by billions of pounds.

Chairman Sir Chris Gent is expected to admit the group spent too much on deals at the time of the tech boom when it reports annual results next month.

Japan's NT&T wrote down £7bn (€11bn) from the value of its overseas investments last week and City investors are nervous Vodafone may have to follow suit.

The move, while not hurting the operational performance of the group, could lead to record bottom-line losses, the Mail on Sunday says.

In its half-year results last November, Vodafone cut £4.5bn (€7.4bn) from the value of assets bought in recent years, including Arcor in Germany.

The company said the future earnings potential of the businesses was not worth as much as it paid at the time of their acquisition.

The write-downs contributed to interim losses of £8.4bn (€13.7bn) by Vodafone and investors will fear more next month could place further pressure on shares.

Justin Urquhart-Stewart, analyst at Seven Investment Management, said the City has been worried more write-downs could be coming.

He added: "Vodafone is likely to be Wobblyfone for the next couple of days until we can get clarification on this."

As well as buying Arcor-parent Mannesmann for £75bn (€122bn) two years ago, Vodafone has laid out £38bn (€62bn) on US company AirTouch. It has also spent an estimated £13bn (€21bn) on licences to operate the 3G next generation of mobile phones.