Vodafone is to dismiss a fifth of its senior head office managers while recruiting nearly 500 sales and retail staff, as it attempts to increase its share of the increasingly competitive mobile internet and broadband market.

The middle management cuts, which will result in 450 job losses from its UK operations, reflects a shift of emphasis away from administration to sales.

Vodafone plans to hire 330 retail staff for its stores to sell data services such as music products and mobile broadband. A further 130 people will be taken on in sales roles in its Enterprise business and 30 in its online sales and customer service division.

The job cuts announcement did not surprise analysts. One said: “About a year ago, Vodafone started getting a lot more aggressive in the UK - O2 had stolen a march on them by cutting prices. Vodafone brought prices down with the view that they would then cut costs longer-term. Refocusing the workforce from back-office to sales and service seems to be sensible.”The company said that the changes have been driven by customer demand, with consumers wanting more internet services on their phones.

Arun Sarin, the Vodafone chief executive, said at the world mobile congress in Barcelona last month that mobile internet must improve or mobile operators would lose out to companies such as Google that are eyeing the market.

Vodafone claims a 50 per cent market share of mobile broadband and BlackBerry use. It said recently that non-text data accounts for 8percent of service revenue, compared with 19.1 per cent from text messaging, and has steadily increased each quarter.

However, analysts said that most of this improvement came from BlackBerry e-mail use or ringtone downloads, rather than the more lucrative internet browsing or data downloading that networks were seeking.

The move into the mobile internet and broadband market is part of Vodafone's “mobile plus” strategy, revealed in May 2006, when it conceded that its mobile-only policy was outdated. Last October it bought broadband company Tele2's operations in Italy and Spain for £537 million. Third-quarter results revealed that Vodafone's mobile internet business was worth £400million, an increase of 28 per cent on the previous year. Vodafone shares closed up 4.2p at 153p.

Phone numbers

252 million Vodafone customers worldwide

66,000 staff worldwide

15.9 million 3G customers

£31.1 billion revenue for year ended March 31

£1.4 billion revenue from data services

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