Vodafone has cut its dividend for the first time to pare debt and invest in new technologies. The telecom operator also needs to complete its acquisition of Liberty Global.

Vodafone is focusing on building superfast 5G networks for retail and enterprise clients. It plans to share infrastructure with rivals wherever possible. The telecom operator is facing heavy payments to launch 5G services and for its fixed-line broadband play.

Vodafone’s dividend payout is one of the biggest in the UK. The company cut full-year dividend by 40 percent to 9 cents a share for the financial year 2018. It had paid 15.07 cents a share in the financial year of 2017. The telecom operator’s CFO had said late last year that the dividend was safe.

“Our service revenue growth came under further pressure – Spain remains a challenging market, South Africa experienced headwinds – plus clearly the German auction has risen to higher levels than expectation on top of extensive coverage obligations, which require capex,” Nick Read the former CFO who now heads the company, told the media.

Under former CEO Vittorio  Colao, Vodafone had broadened its scope of operations from pure-play mobile player to fixed line services in major markets. In the meanwhile, Vodafone withdrew services from other areas in India and the US.

Vodafone is buying Liberty Global’s assets in Germany and Eastern Europe for an enterprise value of €18.4 billion. The acquisition of Liberty Global will add to its massive €27 billion debt load.

Reed said that the dividend cut will help the telecom operator reduce debt as the company expects top-line growth to improve from the second quarter. Vodafone had earlier announced job cuts in Spain and India. In India, the company said that it had realised synergies from its merger with Idea while revenue had stabilised there. The telecom operator made a net loss of Rs48.8 billion in the fiscal fourth quarter in India.

The company reported group revenue of €43.7 billion for the year to the end of March with an operating loss of €951 million. Group revenue was down 6.2 percent over 2017. Adjusted core earnings rose 3.1 percent organically.