Vodafone has warned that intense competition and regulatory pricing pressures will continue to hit profit margins across Europe in the coming year and offset huge growth in new markets such as India.

The mobile phone giant, the biggest in the world outside of China, said operating profits may rise by only around £300 million in the next 12 months despite forecast revenue of as much as £34 billion.

Full-year results today showed operating profits in the year to March 31 rose 1.4 per cent to £9.5 billion.

More than £11 billion of write-offs and impairment charges meant the group made a pre-tax loss of nearly £2.4 billion.

Arun Sarin, Vodafone chief executive, insisted the group was continuing to deliver on the strategy he laid out a year ago after winning a boardroom power struggle.

He said: “We have met or exceeded our financial expectations for the year in all areas.”

But he admitted that market conditions across the UK, Spain, Germany and Italy would “remain challenging” in the year ahead.

Margins in the UK business in the past 12 months plunged 10 per cent as Vodafone battled price competition sparked by T-Mobile.

Vodafone has also suffered from increasing regulatory pressure, which has forced mobile phone operators to cut roaming charges on overseas calls and bring down the cost of connecting calls from rival networks.

Shares in the group rose nearly 4 per cent, a jump of 5.5p to 156.9p, on relief the forecasts for the coming year were not worse.

Mr Sarin said much of the group's growth would now come from emerging markets such as India and Turkey, where Vodafone has spent billions of pounds increasing its market share.

In the past year, organic revenue rose 41 per cent in Egypt, 28 per cent in Romania and by 22 per cent in South Africa.

Mr Sarin said that India, where Vodafone spent £5.5 billion in March to gain control of Hutchison, provided a “very significant opportunity” for further growth.

He added: “A key priority for the year ahead is to continue the expansion of the network and capture the growth opportunity in the market.”

The full-year dividend is going up by 11.4 per cent to 6.76p per share. The pre-tax losses of £2.38 billion compare with a loss of £14.9 billion a year ago.

Vodafone booked £3.5 billion of write-offs in the second-half, following an £8.1 billion charge in the first six months.

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