A SURGE in demand for smart phones and better-than-expected growth in the UK have helped to boost Vodafone's annual profits to £9.5bn.

The Newbury-based firm also saw a strong performance in emerging markets such as South Africa and India as profits rose 9% in the year to March 31.

However, the mobile phone giant expects a lower outcome next year due to tough trading in Spain and Italy, and the absence of its French associate SFR, which it sold in April. Guidance for profits at an underlying level in 2012 has been trimmed to a range of £11-£11.8bn.

That is below the operating profit figure, which rose 3.1% to £11.8bn – at the top end of the firm’s forecasts, allowing for the cost of US partner Verizon Wireless’s iPhone launch.

That helped boost US revenues and, with good performances in Africa, Middle East and Asia Pacific, overall revenue rose by 3.2% to £45.9bn.

Data revenues jumped by over a quarter to £5.1bn, representing 12% of group service revenues as use of smart phones increased.

Vodafone expects tablets such as the iPad to give the market a further boost and become mass market devices eventually. UK revenues, in particular, grew strongly on the back of this trend, and were also helped by customers switching from “all-you-can-eat” packages to pricing plans that reflect data usage.

But the end of call termination charges, to be phased in gradually from next year, will have a “significant negative impact” on UK revenues growth in 2012.