VODAFONE, the world's largest mobile phone company, yesterday said it had sold 4.35 million third-generation devices at the end of August - a rise of about a million since the end of the previous month.

The figures will be heartening for the industry, because while 3G handsets have been available for years, adoption has been slow and the devices have struggled to find their marketplace.

However, Vodafone, led by chief executive Arun Sarin, said that better networks, more handset variety and improved screen and battery life was expected to boost sales over the Christmas season.

Christmas will be a key trading period for all European mobile phone operators, which to date have made only cautious predictions about how many people they expect to buy the new phones, which offer MP3s and CD-quality sound, high-speed web access and video calls.

European operators have invested more than GBP100m on 3G licences.

Vodafone said yesterday that all its new 3G phones would offer services such as a choice of more than 500,000 music downloads as well as mobile television services.

The company, which held its so-called investors' day yesterday, said the 4.35 million 3G devices comprised 3.95 million consumer devices and 400,000 data cards, at the end of August.

Vodafone also indicated that it was already looking beyond its current 3G offering by announcing the launch of HSDPA, a faster version of 3G, in the first half of 2006.

Nonetheless, the company saw its share drop by around 1.3-per cent after it said was focused on turning around its Japanese business but expected greater competition in Europe during the next six months.

Vodafone also said it was still looking for acquisitions in Asia, Poland and France.

The shares fell 2.75p to 151.5p.