The Vodafone board has offered to buy back £1 billion in shares after its results for the first quarter saw it reign in its revenue forecast for the year.
A statement from Vodafone said: "The Board of Vodafone Group has considered the market reaction to the Group’s Interim Management Statement and has decided to introduce a £1 billion share repurchase programme with immediate effect. This action reflects the Board’s belief that the share price significantly undervalues Vodafone.
"Shares will be purchased on market on the London Stock Exchange in accordance with shareholder approval obtained at the Company’s Annual General Meeting in July 2007 and subject to the renewal of that approval at the Company’s AGM on 29 July 2008.
"The maximum share price payable for any shares will be no greater than 105 per cent of the average of the middle market closing price of the Company’s share price on the London Stock Exchange for the five business days immediately preceding the trade date on which any shares are purchased. Any shares repurchased will be held in treasury."
Vodafone’s shares slumped 14 per cent this week as it admitted revenues for the year will be hit by the "challenging operating environment".
Vodafone Group chief executive Arun Sarin said Vodafone expects revenues across all its territories for the year to March 31, 2009, to be at the low end of original forecasts in the range £39.8 billion to £40.7 billion.
Shares dropped 15.65p to 133.6p.
Sarin said: "Notwithstanding this more challenging operating environment, we continue to benefit from a diversity of assets and services, with strong revenue growth in EMAPA and another good quarter of data revenue growth offsetting weakness in Spain.
"Whilst we expect revenue around the bottom of the outlook range, our continued focus on cost reduction enables us to reiterate our operating profit and cash flow guidance for the year."
In the UK, data revenues rallied to counter a 4.4 per cent drop in voice revenues. But its churn was significantly up and it shed 27,000 customers from its UK base.