Vodafone is to spend £7bn upgrading its networks, with an extra £300m committed to the UK, as it prepares for an end to the European economic crisis.
Hundreds of new masts and radios will be installed to boost coverage, with London benefiting from £150m of spend over the next two years, and a 30% increase in masts.
A further £150m will go to the rest of the UK, bringing to £1.2bn the sum Vodafone will spend on its British network over the next three years.
The money is earmarked to improve 3G coverage and roll out faster 4G technology, and to expand Vodafone's retail empire.
"Whilst trading conditions in Europe remain very tough at present," said the Vodafone chief executive, Vittorio Colao, "we are encouraged by the forecast return to economic growth over the next two years and the potential for a shift in regulatory focus to support greater industry investment and consolidation."
Vodafone on Tuesday added £1bn to the £6bn of cash earmarked for Project Spring, which will pay for faster and wider mobile internet coverage and expand the group's TV and broadband activities on the continent following the $130bn (£81bn) sale of its stake in Verizon Wireless.
The company is betting that a European turnaround will counter another half-year of rapidly falling revenues in its major markets.
Organic service revenue – which includes calls, texts and data charges but excludes handsets – was down nearly 5% in the six months to 30 September across the group, with northern and central Europe down 5% and southern Europe nearly 16%. Revenues in Asia and Africa rose nearly 6%.
UK service revenue decreased 4.4%, while in Italy the decline was nearly 17%.
As well as providing cash for networks, the Verizon sale allowed Vodafone to book nearly £17bn of deferred tax losses that it will use to reduce its tax payments over the long term.
The losses, which stem from Vodafone's acquisition of the German mobile carrier Mannesmann in 2001, were able to be recognised after the unwinding of the company structures used to hold its US business.
Pre-tax profits for the six months fell 4% to £6.6bn.
In a statement, the company said: "These are real losses suffered by our shareholders on the fall in the value of Mannesmann after we acquired it and have been disclosed to and examined by the tax authorities in a number of relevant European countries. This incidentally has no impact at all on our tax situation in the UK."
"Until now Vodafone had been recognising these losses steadily but following the agreement to sell our stake in Verizon Wireless it has become clear we now need to do this in one go."
Extra investment in extending Vodafone's coverage cannot come too soon for UK consumers, many of whom complain that service has worsened since the advent of 4G.
Ofcom is so concerned about quality of service across the board, it has requested meetings in the coming weeks with all four UK operators to discuss their plans for improvement.
And last week, it singled out Vodafone as the only network not to have reached the legal minimum 3G coverage by June this year.
Vodafone will use part of the Project Spring money to reduce its dependence on Carphone Warehouse and Phones4U, which account for a estimated 25% of sales, by increasing its store count.
Vodafone has 380 outlets, well behind EE's 600 branches, and O2, which has 466. It is only just ahead of the country's smallest operator Three, which has 350 shops and last week confirmed it was to pull its business from Carphone Warehouse.
Vodafone is now forecasting £4.5bn to £5bn of operating profits for the full year. It has increased its interim dividend per share of 3.53 pence by 8%, and intends to pay 11p for the full year.
