COMPETITION and regulatory pressures may be increasing but Vodafone clearly believes there is still everything to play for in mobile telephony and the stock market appears to agree.

Mobiles may appear irritatingly omnipresent but only 16% of the adult population has one, which is only about half the proportion in, for example, Sweden.

Perish the thought, but

Vodafone believes about half the population will have a mobile by 2005, with the market able to absorb growth of 5% a year.

The group is signing up customers at three times the rate of a year ago, net of cancellations.

Penetration so far is skewed towards the more affluent and there are fears that margins will be squeezed as lower-spending customers sign on. But so far this has not happened, although

pressure on tariffs is bound to continue, given competition and falling fixed-line prices.

However, other premium services are coming along, notably the new-generation mobile licence, universal mobile telecoms system - which will allow high speed Internet access - quality video-conferencing and home shopping over a mobile.

Three to five licences are expected to be up for auction by the Government next June. Unless Vodafone does something stupid it should get one of the licences, although it will mean capital spending of #200m a year to set up.

The group has a wide spread of interests overseas which are now delivering. But it hopes to go further through more acquisitions and is looking in the

Pacific Rim, Africa and western Europe.

The goal is to make #1000m profits a year by 1999-2000, with about a third coming from overseas. This is ambitious but looks achievable given a fair wind.