Vodafone in £6 billion hit as Spain struggles

Unearthing the awkward spots within their businesses is regular practice at telecoms companies at present. Ian Livingston, the new BT head, has been frantically rewriting the value of his multinational contracts.

At Vodafone, Vittorio Colao - another of the new breed of chief executives within the industry - is busy clarifying the value of assets in Spain and Turkey. Writedowns on these divisions - £3.4 billion at Spain and £2.25 billion at Turkey - along with the group's Ghana operation, have taken total impairment charges for the year to a hefty £6 billion.

Of course the Vodafone situation is very different from the one at BT. The mobile group has been hit, in part, by overpaying for acquisitions.

The recession is also hurting it in a multitude of ways - in Spain, where service revenue declined 8.6 per cent in the fourth quarter, the impact has come as migrant workers, many employed in the property sector, have fled home.

Recently Mr Colao boasted that his group was well-placed to weather the recession, likening it to a "four by four" vehicle.

Today's figures, which were otherwise in line with expectations, with revenues of £41 billion and earnings of £14.5 billion, suggest, at present, he is manoeuvring his vehicle skilfully.

But with the business being hit on all fronts - from text messaging, to roaming and business revenues - there will be plenty more bumps in the road.

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