VodafoneThree, the combined mobile network formed from the merger of Vodafone UK and Three UK last year, has upgraded its annual cost savings target to £1 billion by 2032, up from a previous goal of £700 million by 2030.
The new target was unveiled at an investor briefing on Thursday, where the company also set out ambitious growth plans for the years ahead.
VodafoneThree is targeting mid-to-high single-digit compound annual growth in adjusted EBITDAaL, a measure of operating profit that strips out lease costs, between now and 2032.
It also expects operating free cash flow to more than triple over the same period, and is targeting a return on capital employed that exceeds its cost of capital by 2032 and rises materially above it by 2034.
Vodafone Group chief executive Margherita Della Valle said the upgraded targets reflected greater confidence following a strong start for the merged entity.
"After a strong start, we now have even greater confidence in the opportunity ahead," she said.
VodafoneThree said the higher savings target is driven by further efficiencies as its network build completes, benefits from network rationalisation, and the advantages of full group ownership allowing it to move faster.
The company, which holds the UK's largest mobile customer base, said it has achieved record low customer churn across all of its brands since the merger and is seeing growing average revenue per user.
It described itself as the UK's fastest growing broadband provider and the operator with the largest fibre footprint.
VodafoneThree is backed by a ten-year, £11 billion investment programme aimed at building what it calls the UK's best network, with a commitment to reach 99% 5G standalone population coverage by 2030.
Della Valle said VodafoneThree would become an increasingly important contributor to Vodafone Group's medium-term ambition for double-digit organic growth in adjusted free cash flow.
