Vodafone Share News (VOD)

By Lilly Vitorovich Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Vodafone Group PLC (VOD.LN) said Friday it has reached an agreement with U.K. tax authorities and revised its Indian ownership deal with partner Essar Group as the mobile giant reported a better-than-expected revenue performance for the first quarter, driven by improving trends in all regions. The company, which is facing a backlash over its strategy from institutional shareholder Ontario Teachers Pension Plan, has agreed to pay U.K. tax authorities GBP1.25 billion to settle all issues from 2001 to date. No further tax liabilities will arise in the near future under current legislation. In India, where Vodafone operates through a joint venture with local partner Essar, the company has adjusted the price of its agreement to have first option on buying Essar's stake in the joint venture if Essar were to sell. The adjustment takes account of the upfront cost of 3G licences after Vodafone secured these licences through the Indian spectrum auction. Underlying service revenue--one of the key figures tracked by U.K. analysts--rose 1.1% to GBP10.59 billion in the first quarter ended June 30 from a year earlier, beating market expectations of GBP10.39 billion. In May, Vodafone said it expects to return to underlying service revenue growth in the year ending March 31, 2011. First-quarter revenue rose 4.8% to GBP11.26 billion from a year ago. The results come a day after an investor group called for a revamp of Vodafone's board due to concerns about its strategy and track record on acquisitions. Ontario Teachers' Pension Plan, which holds a 0.42% stake in the world's biggest mobile-network operator, plans to vote against the re-election of non-executive Chairman John Bond and Deputy Chairman John Buchanan at Vodafone's annual shareholder meeting July 27. However, OTPP will vote for the re-election of Chief Executive Vittorio Colao, who took the helm in July 2008, as he has started to improve Vodafone's operating performance and competitiveness. Europe and emerging markets such as India and South Africa are key for Vodafone's prospects. But its 45% stake in Verizon Wireless, its U.S. joint venture with Verizon Communications Inc. (VZ), remains a thorny issue for investors as the venture hasn't paid a dividend since 2006. In November, Colao said resolving that issue was the group's top priority. Vodafone shares closed at 149 pence Thursday, valuing the company at GBP78.49 billion. The stock has risen 30% over the past 12 months, outperforming the FTSE 100 index, which has risen 18% over the same period. -By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290; lilly.vitorovich@dowjones.com (END) Dow Jones Newswires July 23, 2010 02:31 ET (06:31 GMT)