Vodafone, the world's largest mobile phone company, said yesterday that it was battening down the hatches to survive the economic turmoil and declared that the days of multibillion- pound deals were over (see Commentary, facing page).

Vittorio Colao, the chief executive, said that he would cut £1billion a year from the group's £22billion operating costs by 2011 and would cut jobs to boost cashflow and meet targets.

He also cut Vodafone's full-year revenue target for the second time in four months, but said that the group would maintain profits.

Revenues are expected to fall to between £38.8billion and £39.7billion for the 12 months to December 31. The group had cut its expectations in July to the bottom of a previous forecast range of £39.9 billion to £40.7billion after a 2.5 per cent fall in revenue at its Spanish business.

Mr Colao said that the group's revenues had been hit by a fall in prices of between 12 and 13 per cent, because of regulatory pressure and competition.

Underlying revenues in Europe declined 1.1 per cent. Service revenues fell 1.7 per cent in the UK, compared with 2 per cent growth in the first quarter, and 2.2 per cent in Spain.

Emerging markets are also hurting. Vodafone was forced to write down £1.7billion on its Turkish business, where upgrading the network is taking longer than expected.

In India, where Vodafone has reduced its prices by 50 per cent to attract new customers, growth had slowed from 46 per cent in the first quarter to 36 per cent.

Reporting his first set of results since taking over in July, Mr Colao outlined a new strategy for the group, essentially tearing up a five-point strategy that has been in place at Vodafone since May 2006.

He said that it was time to focus on the company's assets, rather than acquire new ones, as he concentrated on cost control. He said that jobs would go from group's 80,000-strong global workforce, but gave no detail. The company employs 10,000 people in the UK.

Mr Colao revealed a 17.1 per cent increase in revenues to £19.9billion for the six months to September 30. However, the growth was due almost entirely to currency movements.

Underlying growth fell 1.1 per cent in Europe and edged up 0.9 per cent across the group. Earnings of £7.2billion were in line with forecasts, but pre-tax profit plunged from £4.5billion in the first half of last year to £3.3million in 2008.

Vodafone shares rose 6.19 per cent, or 6.7p, to 115p.

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