Vodafone Group (LSE:VOD) used an investor briefing on Thursday to upgrade the cost-saving target for VodafoneThree, its UK mobile and broadband operation, to £1 billion a year by its 2032 financial year.
The new figure replaces a prior target of £700 million a year by FY30, reflecting what the company called greater confidence in the business after what it described as a strong first year post-merger.
VodafoneThree, formed from the merger of Vodafone UK and Three UK, became the UK's largest mobile operator and a growing force in fixed broadband; Vodafone is in the process of becoming its sole owner through a £4.3 billion cash-funded cancellation of CK Hutchison Group Telecom Holding Limited's 49% stake, a deal expected to complete in the second half of 2026 pending UK National Security and Investment Act approvals.
Alongside the upgraded cost target, Vodafone set new financial goals for the business: mid-to-high single digit compound annual growth in adjusted EBITDAaL (earnings before interest, tax, depreciation and amortisation, after leases) between FY25 and FY32, and operating free cash flow, defined as adjusted EBITDAaL less capital additions, more than tripling by FY32 against FY25 levels.
The company also targeted a return on capital employed that exceeds its cost of capital by FY32, rising to materially above it by FY34.
"We created VodafoneThree because we saw the opportunity to transform the UK market," said group chief executive Margherita Della Valle, adding that the business is "set to become an increasingly important contributor to Vodafone's growth ambitions."
Vodafone said VodafoneThree holds the UK's largest mobile customer base and ranks first for customer experience, with record low churn across its brands and rising average revenue per user, and described it as the country's fastest-growing broadband provider with the largest fibre footprint of any operator.
The group pointed to a 10-year, £11 billion network investment plan intended to build what it called the UK's best network, moving toward a next-generation 5G standalone, AI-ready infrastructure.
Vodafone said the additional cost savings stem from network rationalisation as its build completes and from the efficiencies of full group ownership, and that it sees further potential to extract revenue synergies from the merger.
The company framed VodafoneThree as a key driver of its medium-term ambition for double-digit organic growth in adjusted free cash flow at group level, a goal that sits alongside the FY27 guidance Vodafone lifted earlier this year following the consolidation of Safaricom.