VOD.L - Vodafone Group Plc

LSE - LSE Delayed Price. Currency in GBp
160.28
-1.96 (-1.21%)
At close: 4:35PM GMT
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Previous Close162.24
Open161.28
Bid160.90 x 0
Ask160.92 x 0
Day's Range159.44 - 162.42
52 Week Range122.22 - 171.78
Volume47,702,276
Avg. Volume71,555,534
Market Cap42.905B
Beta (3Y Monthly)0.59
PE Ratio (TTM)N/A
EPS (TTM)-28.20
Earnings DateNov. 12, 2019
Forward Dividend & Yield0.08 (4.95%)
Ex-Dividend Date2019-06-06
1y Target Est2.01
  • India Won’t Waive $13 Billion of Mobile-Phone Firms’ Dues
    Bloomberg

    India Won’t Waive $13 Billion of Mobile-Phone Firms’ Dues

    (Bloomberg) -- India won’t back down from collecting $13 billion of past dues from debt-laden telecom carriers because the industry is not under stress, a government official with knowledge of the matter said, a move that could deepen Bharti Airtel Ltd. and Vodafone Idea Ltd.’s financial woes.India expects the carriers to pay up within 90 days as ordered by the Supreme Court last month, the official said, asking not to be identified, as the discussions are private. A panel of top bureaucrats could look at deferred payment plan for some of the dues, the person said.The government’s stand about the health of the industry mirrors comments made by billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd., which has said it has a “divergent view” from its rivals. High fees, frequent flip-flops and endless tax demands over the years have driven most operators aground. From over 10 operators few years ago, India has just three non-state players left with two of them saddled with a mountain of debt.Vodafone Group Plc’s Indian venture has $14 billion worth of obligations, while Bharti Airtel is rated junk by Moody’s Investors Service. “All telecom operators have asked for requisite help in reducing” the financial stress, Vodafone Idea said last month.The “extraordinary scenario” being shown is “just a machination to extract relief,” Reliance Jio said in a letter to the minister of communications on Oct. 31.Bharti Airtel’s shares fell 3.3% in Mumbai on Wednesday. Vodafone Idea lost 8.3% while Reliance Industries Ltd. slid 0.9%. The benchmark S&P BSE Sensex rose 0.6%.In the latest instance, the court ordered operators to pay dues using a disputed method for calculating the annual adjusted gross revenue, a share of which is paid as license and spectrum fees. It upheld the government’s method that includes income from non-telecom businesses like dividend from income and capital gains from the sale of assets while rejecting a plea to exclude them.Spectrum PaymentStill, the official said the government is working on a plan to reduce the license fee and providing a two-year moratorium on pending spectrum payments. The proposal will be sent to the finance ministry first before it is taken up by the cabinet, the official said, adding that this may happen in the current financial year.The telecom ministry spokesman didn’t immediately respond to requests for a comment.A panel of senior government officials is examining feasibility of deferring payment for airwaves that are due by March 2021 and March 2022 as demanded by telecom companies, a government official told reporters last week. It will also consider the demand for reduction in spectrum usage levies and the Universal Service Obligation Fund charge.On the introduction of 5G airwaves, the official said there will be no delay in auction, which is due this financial year, and that the government isn’t presuming the telecom sector is under stress. The reserve price for 5G spectrum will not be lowered, he said.India has fallen behind China and some other countries in plans to introduce 5G, super fast networks seen as essential to developing factory automation, autonomous driving and other artificial intelligence applications.(Update with share performance in sixth paragraph)To contact the reporter on this story: Ragini Saxena in Mumbai at rsaxena30@bloomberg.netTo contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Unni Krishnan, Sam NagarajanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Britain's Virgin Media switches to Vodafone's mobile network
    Reuters

    Britain's Virgin Media switches to Vodafone's mobile network

    Britain's Virgin Media is ditching BT's mobile network for rival Vodafone from late 2021 in a five-year deal that will allow it to launch new services such as 5G to its more than 3 million customers. Virgin Media, which offers cable TV and broadband services, pioneered the mobile virtual network operator (MVNO) model, whereby a company offers own-branded mobile on an established partner's network. It has used BT's EE network for nearly 20 years, including before BT owned it, but its customers will be switched onto Vodafone's network in 2021 after the company won the new contract.

  • India Is Gouging Its Wireless Carriers to Fill a Budget Hole
    Bloomberg

    India Is Gouging Its Wireless Carriers to Fill a Budget Hole

    (Bloomberg) -- When Arun Sarin, Vodafone Group Plc’s India-born former CEO, was charting the British telecommunications firm’s expansion into emerging markets in the mid-2000s, his home country with more than a billion potential phone users seemed a compelling choice.Sarin wasn’t alone. Norway’s Telenor ASA, Russia’s Mobile TeleSystems PJSC and Malaysia’s Maxis Bhd were also among a slew of companies that flocked to this fast-growing market. The carriers banded with local partners, bid for airwaves and licenses, spending billions of dollars to prepare their networks.But what once appeared to be their most-promising Asian wireless market has turned sour. Vodafone’s Indian venture with billionaire Kumar Mangalam Birla, saddled with $14 billion of debt, is said to be seeking to revamp its borrowings amid mounting losses and a tariff war. Tycoon Sunil Mittal’s Bharti Airtel Ltd. is rated junk by Moody’s Investors Service. In a market that had a dozen carriers two years ago, just three are left standing today -- two of them, barely.High fees, frequent policy flip-flops, endless tax demands from an unsympathetic bureaucracy that treated carriers as cash cows have driven most of the operators aground. The industry has become the latest cautionary tale for investors in India, showing why despite moving up the global rankings for ease of business, the burgeoning $2.7 trillion economy with a massive consumer base remains a tough, unpredictable place for those who still dare.The latest blow to the survivors came last week. The nation’s Supreme Court, ruling on a years-long dispute, ordered several carriers to pay the government an additional $13 billion in past fees. The British firm’s venture, Vodafone Idea Ltd., faces a bill of $4 billion, a burden that could sink the company.“The government is becoming greedy and extracting the maximum from them,” said Mohan Guruswamy, a former finance ministry official and now chairman of the Centre for Policy Alternatives in New Delhi. “The whole sector is in the doldrums. This judgment will effectively destroy Vodafone Idea, and what you’ll have is an emerging duopoly.”When India announced its New Telecom Policy in 1999, it said the industry was of “vital importance” with “widespread ramifications on the entire economy,” and vowed to create an “enabling framework for the development” of telecommunications.Record RakingWhile that worked in theory, policy makers also realized that the auction of airwaves and sale of licenses could fetch billions of dollars, a revenue source key to narrowing the government’s budget deficit. For instance, in a 2015 auction, India raised a record $18 billion, after getting almost $10 billion in the previous year. But in 2012, a plan to collect as much as 400 billion rupees ($7.3 billion at the then exchange rate) flopped as bidders balked, prompting it to cut prices later.Spectrum costs in India are among the highest in the world, according to data compiled by Analysys Mason Spectrum Tracker. The leading telecom operators in India pay the largest share of their aggregate revenue for airwaves at 7.6%, followed by Thailand at 7.3% and Bangladesh at 7%, according to Moody’s Investors Service.Driving Up CostsWhile the government set high prices, the carriers had themselves to blame too. Competition drove the operators to outbid each other at spectrum auctions, driving up their costs.As a result, companies took on billions of dollars in debt to stay in the game even as competition among a dozen operators for a slice of the market drove down tariffs to less than a cent, weighing on their earnings. Then came Reliance Jio Infocomm Ltd. in 2016, offering free calls and cheap data on its 4G network, backed by the deep pockets of billionaire Mukesh Ambani’s oil-to-petrochemicals empire.Jio’s entry shook up the industry that was already hobbling.In the past two years, two of India’s larger telecom operators -- Malaysian tycoon T. Ananda Krishnan’s Aircel Ltd., and Anil Ambani’s Reliance Communications Ltd. -- went into bankruptcy. Vodafone’s India unit announced its merger with Birla’s Idea Cellular Ltd. in 2017 to take on Jio, but it has reported losses every quarter since.“The Indian telecom market had three major challenges,” said Sanjay Kapoor, former CEO of Bharti Airtel’s India and South Asia operations and now a director on the board of Saudi Telecom Co. “Intense competition, high cost structure with exorbitant spectrum prices coupled with government charges and lowest average revenue per user.”But there were other equally daunting hurdles too. Some examples of policy flip-flops here:A decade after its struggle in India, Newbury, England-based Vodafone Group has one foot out the door. CEO Nick Read said in September that the company isn’t keen to plow any more money into the local venture, in which Vodafone holds about 44%. A Vodafone Group spokesman declined to comment for this story, while Idea said Thursday that it isn’t aware if its British partner is looking to exit India.Former Vodafone CEO Sarin didn’t immediately respond to requests for comments.Warned LendersVodafone Idea has approached creditors for better terms, including a temporary halt to payments, and has warned lenders it won’t be able to honor its commitments for long under current conditions, people with direct knowledge of the matter said. The company denied making such a move, but said “all telecom operators have asked for requisite help in reducing” the financial stress. Shares of Vodafone Idea have tumbled 81% this year following a 65% slump in 2018.Following the Supreme Court ruling on the extra fees, Bharti Airtel deferred its quarterly earnings announcement by two weeks to Nov. 14. Fitch Ratings said Oct. 30 that it’s placed Bharti on negative watch at BBB-, the lowest investment grade.The court order is the “last straw,” the Cellular Operators Association of India said last week, while Bharti and Vodafone Idea urged the government to address their concerns and mitigate their financial stress.Meanwhile, Prime Minister Narendra Modi’s government said this week that it is considering some relief measures. A panel of senior bureaucrats will look into steps including deferment of airwaves payments that are due by March 2021 and 2022.“The government on its end is in a difficult position where if it lets Vodafone Idea fail, it will lead to a duopoly, which is not the healthiest market structure for any country,” said Rohan Dhamija, head of South Asia and Middle East at Analysys Mason. “We, hence, feel that the government might step in with subtle help for the sector.”(Updates with Vodafone Idea’s stock decline in 2019)\--With assistance from Bibhudatta Pradhan, Dave McCombs and Thomas Seal.To contact the reporters on this story: P R Sanjai in Mumbai at psanjai@bloomberg.net;Ragini Saxena in Mumbai at rsaxena30@bloomberg.netTo contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, Bhuma ShrivastavaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Vodafone and MasMovil deny holding tie-up talks in Spain
    Reuters

    Vodafone and MasMovil deny holding tie-up talks in Spain

    Both Vodafone and MasMovil denied a report by the El Confidencial news website saying the Spanish mobile operator was working with Goldman Sachs to buy the British telecom's business in Spain for 6 billion euros (£5 billion). MasMovil and Goldman Sachs have held talks with the world's second largest mobile operator regarding its Spanish business, the Spanish website reported, citing unnamed sources close to the talks. El Confidencial said MasMovil, which has grown significantly in recent years via acquisitions in many cases financed by the U.S. investment bank, last summer submitted a non-binding offer rejected by Vodafone, which instead asked for 8 billion euros for its Spanish unit.

  • John Malone’s $6.4 Billion UPC Sale Unravels
    Bloomberg

    John Malone’s $6.4 Billion UPC Sale Unravels

    (Bloomberg) -- Billionaire cable mogul John Malone’s plan for a $6.4 billion sale of UPC Switzerland fell apart after would-be purchaser Sunrise Communications AG concluded its shareholders won’t support the move.Sunrise Chief Executive Officer Olaf Swantee said Tuesday in an interview that the deal was “dead.” The company had earlier called off a shareholder vote scheduled for Wednesday on a rights offering to fund the purchase. UPC parent Liberty Global Plc has yet to say it has walked away.Liberty Global Chairman Malone had agreed in February to sell the unit, raising the prospect that he would rake in a heftier cash pile to support a range of activities, including potential shareholder payouts and acquisitions in western Europe. But Freenet AG, Sunrise’s biggest investor, railed against the purchase price and an influential proxy advisor came out against the deal, wiping out the possibility of success.This is the second setback this year for the man who sold cable provider Tele-Communications Inc. to AT&T Inc. for $48 billion in 1999 -- his attempted purchase of Millicom International Cellular SA fell apart in January on price concerns. Liberty Global shareholders may also need to recalibrate their expectations for the prices they can expect for future transactions.“Malone’s not had many failures in his career and this is a reputational setback if nothing else,” said Mirabaud analyst Neil Campling. “Liberty Global may have to reset some of its ambitions around the values it can achieve for future M&A.”The transaction, which would have created a bigger player to compete against Swisscom AG, valued UPC at 10 times adjusted earnings before interest, taxation, depreciation and amortization. Sunrise had agreed to finance the deal through a mix of debt and about 4.1 billion Swiss francs ($4.2 billion) raised from a rights issue. Freenet balked at this mix. Eventually the rights issue was cut to 2.8 billion Swiss francs, and last week Liberty Global pledged as much as 500 million francs to support the capital increase.These changes weren’t enough to earn the approval of proxy advisor Institutional Shareholder Services, which said a fair value range for UPC was 4.6 billion Swiss francs to 5.2 billion Swiss francs.Examining OptionsLiberty Global is still examining its options within the current share purchase agreement, said a spokesman for the company. That agreement expires Feb. 27.An attempt by Liberty Latin America to take over Millicom for $7.6 billion in cash and stock fell through after the target’s executives were said to have demanded changes to the terms of the transaction, including a higher premium and cash component. The unwinding of the Swiss effort -- Freenet CEO Christoph Vilanek said in a phone interview Tuesday that there’s no way to rescue it -- sends a signal to European companies considering participating in industry consolidation.An end to the deal “probably tells telecom management in Europe that paying a 10 to 12 times Ebitda multiple on a transaction isn’t getting support from investors,” Stephane Beyazian, analyst at Mainfirst, said Monday.Sunrise shares rose as much as 4.6%, the most since Jan. 3, while Liberty Global’s Class A shares sank as much as 5.5% in early New York trading, the biggest drop since May. Standalone StrategySwantee said Sunrise has no immediate plans to consider alternative acquisitions, and the company will revert to its standalone strategy, “which fortunately has been working well.”He said earlier this month that a management shake-up at the Swiss company was likely if the deal doesn’t go through. When asked Tuesday if he would quit, he said “our priority now is to stabilize the company.”Swantee will have to do so in a competitive environment that has Swiss carriers locked in an aggressive discounting war. The UPC purchase would have eased pricing pressure by reducing the number of players.“The cancellation is a consistent step given the shareholder resistance, but also a missed opportunity to consolidate the Swiss telecom market,” said Mark Diethelm, analyst at Vontobel Securities.Liberty Global is not short of cash - it will still have about $9 billion in proceeds from sales of businesses to Vodafone Group Plc and Deutsche Telekom AG, said Pivotal Research analyst Jeff Wlodarczak.Tuesday’s outcome may complicate other potential deals at London-based Liberty Global, such as acquisitions involving partially-owned Belgian unit Telenet or a Dutch joint venture with Vodafone.Telefonica SA’s British mobile-only company O2 has long been speculated as a neat fit for the fixed-line-only network at Virgin Media, which now makes up the majority of Liberty Global’s sales. Meanwhile, Liberty executives are preparing to spend money extending their U.K. broadband reach in a land-grab against BT Group Plc.UPC Switzerland has been Liberty Global’s worst-performing unit, and Malone could attempt to find another partner -- Salt, the mobile operator controlled by French billionaire Xavier Niel, is a potential candidate.“It seems to us that an absence of compromise and trust sank this deal,” Berenberg analyst Usman Ghazi wrote in a note. “Liberty Global was unwilling to address the legitimate grievances of Sunrise shareholders. Those who intended to vote against it were merely saying that the merger need not be pursued at any price, and this was a judgment call that we sympathized with.”(Updates with Liberty Global shares)\--With assistance from Stefan Nicola.To contact the reporters on this story: Albertina Torsoli in Geneva at atorsoli@bloomberg.net;Thomas Seal in London at tseal@bloomberg.netTo contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Anne PollakFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Could The Vodafone Group Plc (LON:VOD) Ownership Structure Tell Us Something Useful?
    Simply Wall St.

    Could The Vodafone Group Plc (LON:VOD) Ownership Structure Tell Us Something Useful?

    If you want to know who really controls Vodafone Group Plc (LON:VOD), then you'll have to look at the makeup of its...

  • The Upside to Facebook’s Libra Disaster
    Bloomberg

    The Upside to Facebook’s Libra Disaster

    (Bloomberg Opinion) -- It’s just as well that big companies that process and facilitate payments have quit Facebook’s Libra cryptocurrency project, fearing a regulatory backlash. If Facebook really wants to bring financial services to the “unbanked,” it should try doing it on a smaller scale than these companies’ presence promised. And even then, the probability of failure will be high.It’s clear why PayPal Holdings Inc., Stripe Inc., eBay Inc., MasterCard Inc. and Visa Inc. have decided not to join the Libra Association, which Facebook has been organizing to run the proposed digital currency. They took seriously the recent warning of Senators Brian Schatz of Hawaii and Sherrod Brown of Ohio that because of their membership, they could “expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activities.” The concern is that a cryptocurrency used in conjunction with encrypted messaging could potentially be used in illegal transactions, and anyone involved in creating such an opportunity would be suspect.U.S. regulators are perfectly capable of scuppering major cryptocurrency projects. On Oct. 11, the U.S. Securities and Exchange Commission announced it had stopped Telegram Group Inc. from distributing digital tokens, so-called Grams, to the investors who contributed $1.7 billion to the creation of the cryptocurrency last year. These include major U.S. venture capital firms such as Benchmark, Sequoia and Lightspeed. The same could easily happen to Libra.That’s the problem with starting so big. Telegram’s token offering was the biggest ever recorded. Facebook made a big announcement on Libra and presented a list of partners that read like a Who’s Who of the payments industry. They envisaged global launches for their cryptocurrencies. Of course regulators and politicians were alarmed.To avoid this kind of outcome, Facebook — whose stated goal with Libra is to offer affordable payment services and loans to people currently priced out of the financial services market — could have tried the strategy that got results for one of its remaining partners, Vodafone Group Plc. Vodafone launched M-Pesa, Kenya’s storied “mobile money,” in 2007, and one of the project’s major assets was the Kenyan central bank’s consent to the launch without any formal regulation. Vodafone’s local cellular operator, Safaricom Plc, quickly built up a network of stores where people without bank accounts could pay in and receive cash, and old-fashioned mobile phones began to double as wallets for transfers and purchases. The lack of regulatory intervention and the large physical network, fed by relatively generous commissions, made sure that by 2019, M-Pesa claimed 37 million active customers in seven African countries. But attempts to transplant the service to many other markets have failed. Vodafone has closed M-Pesa in India (in part because of regulatory obstacles), South Africa (low customer interest), Romania and Albania (apparently it was unprofitable). Vodafone discovered there was no cookie-cutter solution. In different countries, lenders, retailers and mobile operators offered competing services, and regulatory scrutiny varied. To find countries in which to launch such an electronic money service, one would need to go down the list of nations with large populations of the unbanked. The top 20, according to the World Bank, includes big ones, such as China, India, Indonesia and Brazil.But in most of these countries, people are already using some form of digital money in lieu of dealing with traditional financial institutions. That’s why the list of 20 countries with the smallest percentage of people who have recently made or received digital payments looks completely different.In other words, it’s not easy to find a country where a lot of people have neither a bank account nor access to other kinds of financial services. And then there’s a chance that the cash-using population of a specific country wants to stay that way. One possible reason M-Pesa didn’t quite work in Albania and Romania is that these countries have large informal economies. With up to a third of gross domestic product “in the shadow,” traceable electronic transactions are unattractive compared with cash. These difficulties of finding good target markets, and ones with friendly regulators to boot, should explain Facebook’s desire to launch at scale, to throw everything at the wall and see what sticks. But the risk with this approach is that the idea of offering cheap financial services to the unbanked begins to look like a smokescreen for building a huge unregulated bank in the developed world — just what regulators in Europe and the U.S. fear the most.Instead of pushing ahead with the remaining partners and risking the same kind of trouble as Telegram, Facebook should go back to the drawing board and start thinking of smaller projects tailor-made to specific countries’ requirements. Expansion would be slow, and there would be failures and miscalculations along the way, but regulators in each market might be easier to persuade that the project’s goals aren’t nefarious. To contact the author of this story: Leonid Bershidsky at lbershidsky@bloomberg.netTo contact the editor responsible for this story: Tobin Harshaw at tharshaw@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • UPDATE 3-Facebook's Libra announces board as support shrinks further
    Reuters

    UPDATE 3-Facebook's Libra announces board as support shrinks further

    LONDON/SAN FRANCISCO, Oct 14 (Reuters) - Backers of Facebook Inc's Libra cryptocurrency project pledged to forge ahead after selecting a five-member board on Monday, shrugging off the latest member defection by online travel company Booking Holding earlier in the day. The owner of Priceline, Kayak and Booking.com on Monday confirmed that it had pulled out of the group, which is trying to bring digital coins into mainstream commerce. Libra lost its last global payments backers on Friday, when Mastercard Inc and Visa Inc abandoned the Geneva-based Libra Association.

  • Did Cable Cowboy John Malone Just Blink in a Deal?
    Bloomberg

    Did Cable Cowboy John Malone Just Blink in a Deal?

    (Bloomberg Opinion) -- Did John Malone just blink in an M&A deal? The cable tycoon’s Liberty Global Plc has just agreed to help finance Sunrise Communications Group AG’s 6.3 billion Swiss francs ($6.3 billion) purchase of Liberty’s business in Switzerland. It’s a neat way of lending a helping hand to a struggling buyer without being seen to soften the terms of the deal itself. It still may not be enough to get the transaction done.Sunrise’s purchase of Malone’s UPC Switzerland has been on the ropes for months. The Swiss buyer’s biggest shareholder, German telecoms operator Freenet AG, and a couple of investment funds are opposed. Sunrise needs to do a 2.8 billion Swiss franc rights offer to pay for the deal, which in turn depends on majority shareholder support. Freenet’s opposition is unhelpful enough given its 25% stake. Last week, the shareholder advisory service ISS also recommended that investors withhold their support.That has rattled Liberty. Malone’s group now says it will put as much as 500 million Swiss francs into the rights offer if Sunrise’s own investors (most likely Freenet) don't stump up. This could be seen as a vote of confidence in the enlarged Sunrise from the American billionaire, which might make shareholders feel more comfortable about voting in favor of the fundraising. But the move could be seen equally as the price Liberty is willing to pay to get a deal over the line without amending the headline terms, for example by cutting the price or taking stock instead of cash.This deal isn’t cheap but it makes sense for Sunrise. The buyer reckons UPC is worth 5.1 billion Swiss francs on a standalone basis, and it values the cost savings and revenue gains of a deal at some 3.1 billion francs. That total value is worth nearly 2 billion francs more than the price being paid.Sure, UPC is probably worth less than Sunrise reckons. The same goes for those savings. Say UPC is more plausibly worth about 4.6 billion euros, based on it maybe making 600 million francs of Ebitda this year and commanding a multiple just shy of where Sunrise trades. And say you cut those anticipated savings by 25% and they’re worth 2.3 billion francs. On this view, the total value to Sunrise shareholders would still exceed the price paid, plus they would keep all the upside if the financial benefits of a deal turned out better than hoped.Sunrise shareholders could kill the deal in the hope of striking a better transaction with Liberty at a later date — maybe involving less cash, more stock and a cheaper price. After all, it’s now clear that Malone is fine with taking Sunrise shares. But Liberty is flush with cash at present from selling assets to Vodafone Group Plc. It can afford to spend some of that in defense of its interests. There's a big leap from that to believing Malone should, let alone will, swallow worse terms another day.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Vodafone to reduce store footprint by 15% - CEO
    Reuters

    Vodafone to reduce store footprint by 15% - CEO

    Vodafone will reduce its store footprint by 15%, chief executive Nick Read said on Tuesday, as the telecoms firm makes better use of data to optimise its store estate. Vodafone has around 5,000 stores in Europe.

  • Vodafone tests new network tech in UK in challenge to 'big three' suppliers
    Reuters

    Vodafone tests new network tech in UK in challenge to 'big three' suppliers

    Vodafone is testing innovative open access radio technology in Britain - a first for Europe - in a move that could break the grip Huawei, Ericsson and Nokia hold on the telco equipment market. OpenRAN, which has been developed by Vodafone and Intel , standardises the design of hardware and software in the infrastructure, masts and antennae that make up the radio access network that carries mobile calls and data. Vodafone, the world's second largest mobile operator, has trialled the technology in laboratories in South Africa and deployed it in Turkey to deliver 2G and 4G services to customers in both urban and rural areas.

  • Eco-Friendly Phone Companies Brace for 5G’s Energy Bill
    Bloomberg

    Eco-Friendly Phone Companies Brace for 5G’s Energy Bill

    (Bloomberg) -- The next generation of telecommunications technology could be the key to ending years of stagnation in the industry. But it’s also set to create a difficult dilemma for European phone companies.Carriers shelled out $80 billion to power the world’s antennas last year, according to Nokia Oyj. The prospect of having to raise spending on electricity – energy demand could triple with the introduction of 5G equipment, according to industry body GSMA – won’t sit well with phone companies that are already struggling to pay their dividends. At the same time, firms such as BT Group Plc and Vodafone Group Plc have pledged to slash emissions, and that will require a rapid shift to renewable energy.Just as carriers are about to roll out vast quantities of power-hungry gear, they’re also promising to save the planet. And funds are tight. Accomplishing everything at the same time could be a tall order.“If they have set up ambitious targets for overall power consumption and CO2 emissions, those could potentially be in conflict when they start to roll out 5G,” said Jerker Berglund, industry consultant at JB Sustainable Approach AB. “Reducing total power consumption is going to be a challenge.”5G could unleash a 1,000-fold jump in data demand for connecting factories and cars and supercharging mobile devices, according to the GSMA. That’s an irresistible sales prospect for a telecom industry whose revenues have yet to recover from a slump that started in 2015.Next-generation antennas and masts can be 10 times more energy efficient than 4G’s. However, these power savings could get swamped by the surge in demand for new applications. 5G will link up billions of things that have never been connected before. To accommodate all these new connections, masts might have as many as 128 antennas, versus just four or eight on a typical 4G mast. Bouncing signals through cities may require thousands of transmitters and receivers to be bolted onto rooftops and street furniture. This looks like it will all require a lot more bandwidth, and a lot more power.What’s more, carriers can’t afford the cost of swapping out all their equipment at once, Berglund said. The rollout will have to happen gradually, so many masts will still carry less efficient 4G, 3G and 2G antennas alongside 5G ones. This situation could last for years – some 3G kit is still in place 18 years after that technology was introduced.This article is part of Covering Climate Now, a global collaboration of more than 250 news outlets to highlight the climate change story.Electricity already makes up about a third of carriers’ average operational costs, according to Nokia, and raising this will pressure balance sheets when the industry isn’t in a good place to cope. Vodafone has cut its dividend to conserve cash to pay for spectrum and capital investment. Bank of America Merrill Lynch analysts said Monday they expect BT to slash its dividend by as much as 40% to fund capital expenditure and price cuts.“As we consume more, power’s going up, and the industry is trying to bring that down as much as possible,” said Henry Calvert, head of future networks at the GSMA, the mobile industry trade body. “There’s a lot of activity in the industry about making the power we use more efficient.”But whatever fixes carriers make to lower energy bills – sharing networks, getting masts to autonomously power down at times of low data demand, introducing “beam-forming’’ so smart antennas can pinpoint devices instead of pumping out data indiscriminately – the surge in power usage creates a challenge for meeting emissions goals.Deutsche Telekom AG, for example, pledged a 90% reduction in carbon emissions between 2017 and 2030. In total, European carriers will have to reduce carbon dioxide emissions by 6 million metric tons within 11 years to achieve their carbon targets, BloombergNEF analyst Kyle Harrison said in a research note.One solution is for the telecom companies to shift their power supply to renewables, but this can’t be done at the flick of a switch. Clean-energy contracts are complicated and can take years to negotiate.Carriers will be under pressure to sign new ones quickly to cope with 5G’s power demands, Harrison said. They’ll be vulnerable to striking bad deals, and price fluctuations in energy markets can turn some arrangements that initially look good into losers in the longer term. “The switch to 5G is going to put more pressure on telecoms to purchase clean energy and reduce their emissions,” he said. “Many clean energy deals can result in losses for corporations. Telecoms will need to put extra consideration into this as their power demand goes up, especially if losses will impact their investments into 5G.”To contact the author of this story: Thomas Seal in London at tseal@bloomberg.netTo contact the editor responsible for this story: Jennifer Ryan at jryan13@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Australian watchdog hurt competition by barring Vodafone, TPG merger-telcos
    Reuters

    Australian watchdog hurt competition by barring Vodafone, TPG merger-telcos

    Australia's antitrust regulator has hurt competition by blocking a A$15 billion ($10 billion) merger between the nation's third- and fourth-largest telecoms providers, the companies said in court on Tuesday as their legal appeal got underway. The Australian Competition and Consumer Commission (ACCC) opposed in May a combination of TPG Telecom Ltd and the local joint venture of Britain's Vodafone Group PLC on the grounds it would eliminate a potential fourth mobile network competitor. A coming together of the companies would actually encourage competition but "the pro-competitive effects of this merger are imperilled by the ACCC's opposition to it", Vodafone lawyer Peter Brereton said.

  • Are Investors Undervaluing Vodafone Group Plc (LON:VOD) By 49%?
    Simply Wall St.

    Are Investors Undervaluing Vodafone Group Plc (LON:VOD) By 49%?

    Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Vodafone Group Plc...

  • Bloomberg

    Infobip Taps Ex-Banker as CFO as IPO, Stake Sale Plans Loom

    (Bloomberg) -- Infobip Ltd., a Croatian software supplier for companies including Uber Technologies Inc, has tapped a former investment banker as chief financial officer as it weighs an initial public offering.Mario Baburic is to take up the role that wasn’t covered at the company, effective immediately, according to a statement from the Croatian firm. Previously, Baburic headed corporate finance operations for UniCredit SpA’s Croatian unit until 2012 and then moved on to run global business development at Podravka, a Croatian food producer. He also founded Creative Fields Holding, a technology startup.Infobip is considering holding an IPO in New York, while also looking at other options to raise cash as it eyes expansion in the U.S., Chief Executive Officer Silvio Kutic said in August.The company provides corporations with technology to send notifications to customers through different channels, such as WhatsApp or text message. Among other things, the technology allows companies to mask contact details between employees and customers. Infobip clients include Vodafone Group Plc and Costco Wholesale Corp.To contact the reporter on this story: Rodrigo Orihuela in Madrid at rorihuela@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Vodafone UK appeals move to ease price caps on BT business lines
    Reuters

    Vodafone UK appeals move to ease price caps on BT business lines

    Vodafone UK is seeking to overturn a move by regulator Ofcom to relax restrictions on how much BT can charge for business fibre connections, saying it will result in higher bills for companies, universities and hospitals. Ofcom had already eased price regulation in central London in a review in 2016, saying BT did not have significant market power. It has now relaxed the restrictions in other cities where BT faces two or more rivals, such as Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester.

  • U.S. Firms Steer Clear of Europe's Big Mobile Tower Sell-Off
    Bloomberg

    U.S. Firms Steer Clear of Europe's Big Mobile Tower Sell-Off

    (Bloomberg) -- European phone companies are selling their mobile masts and growth-hungry U.S. tower companies have money to spend -- it looks like a marriage made in heaven.Instead, firms like American Tower Corp. and Crown Castle International Corp. are largely staying away, making it easier for Spain’s Cellnex Telecom SA and infrastructure funds managed by Macquarie Group Ltd., KKR & Co. and others to sweep up the region’s tower assets.Their hesitation is driven partly by price: the global hunt for yield has driven up the premium for these assets, which offer reliable, steady income streams. Independent tower companies also won’t pay top dollar unless they see a path to significant revenue growth -- and that’s where they have a problem with Europe.“The American tower companies say, ‘OK, Europe is fine at the right price, but prices are not where we need them to be, so we think the opportunities elsewhere are more attractive,”’ said Nick Del Deo, senior analyst at U.S. research firm MoffettNathanson.Tens of thousands of European masts are expected to see ownership changes in the next two years as companies such as Iliad SA, Vodafone Group Plc and Telecom Italia SpA bring in new investors to reduce debt and share the heavy cost of rolling out 5G technology.But only a quarter are likely to end up with independent operators, according to TowerXchange. Vodafone and CK Hutchison Holdings Ltd. are creating separate units for almost 90,000 towers and the consultancy expects them to maintain control over those businesses. That’s a turn-off for independent companies, which try to maximize revenue by leasing mast space to as many network operators as possible.Many European carriers want to keep some hold on their towers because they see mobile infrastructure as a strategic asset that can help them manage costs and perhaps gain a competitive edge. They’re also mindful of what happened in the U.S., where operators rushed to sell their towers more than a decade ago only to find themselves stuck with a big bill for leases and capacity rights.Vodafone Surges on Possible IPO, Stake Sale of Towers UnitVodafone and Telefonica Ink 5G Terms in Move to U.K. Tower SalesNiel Agrees to $3 Billion of Phone Tower Sales to CellnexCK Hutchison to Separate Out European Phone Towers BusinessSelling full ownership of towers to independent players can spur innovation and reduce expenses by encouraging carriers to share infrastructure, avoiding costly duplication. European carriers’ insistence on maintaining control means the continent’s progress in rolling out 5G will likely continue to be slower compared to the U.S., where towers are largely in independent hands.“There is a risk that the European carriers go too far the other way,” Del Deo said. “The captive tower model, if you look globally, has never proven to be that effective.”For now, American Tower is mostly relying on building towers in Africa, Latin America and India for its international growth.Crown Castle didn’t respond to a request for comment on its future European asset bidding plans. American Tower declined to comment. Its chief executive officer, James Taiclet, told analysts last month that recent large European tower sales didn’t meet its bar for growth prospects and asset costs.Here are some other reasons why U.S. tower firms aren’t piling into Europe:Redundancy: Europe has more cases of towers operated by rival carriers sitting in close proximity. An independent owner may want to remove one to cut costs, but the tower often comes with a ground lease that they must keep paying for years.Less Potential: Europe has lots of rooftop antenna sites, which can’t accommodate as many customers as can a ground-based tower. Many European portfolios include broadcast towers in rural areas that may not be as valuable as mobile towers.Radio Emission Rules: In some countries, rules on maximum electromagnetic radio emissions limit the number of antennas a tower firm can install at a single site.\--With assistance from Scott Moritz.To contact the reporter on this story: Thomas Pfeiffer in London at tpfeiffer3@bloomberg.netTo contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net, Jennifer Ryan, Anthony PalazzoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Amazon’s Cloud-Computing Empire Faces Threat From Edge of the Network
    Bloomberg

    Amazon’s Cloud-Computing Empire Faces Threat From Edge of the Network

    (Bloomberg) -- Three companies — Amazon.com Inc., Microsoft Corp. and Alphabet Inc. — quietly dominate the world of cloud computing.With more more than 100 giant data centers worldwide, they rent out computing power to all manner of customers, making billions of dollars along the way. In fact, cloud computing has done more to fuel Amazon’s earnings in recent years than its e-commerce business.But there’s a threat looming on the horizon, quite literally at the edge of the network. With so many mobile devices and sensors now connected to the internet — and relying on artificial intelligence — more people and companies need their computing power close to them. For everything from fast analysis of road conditions to streaming holographic concerts, remote data centers are just too far away.That’s going to hand a huge opportunity to wireless carriers, which are building fast 5G networks to handle the task. And create a threat for the dominant cloud-computing players, according to telecom analyst Chetan Sharma. “Over time, cloud will be primarily used for storage and running longer computational models, while most of the processing of data and AI inference will take place at the edge,” said Sharma, who just wrote a report on the topic sponsored by software provider AlefEdge Inc. He pegs the size of this so-called edge-computing market at more than $4 trillion by 2030.Wireless carriers and the owners of cell towers have a big advantage in the edge-computing race: Not only do they control access to high-speed telecommunications networks, they have valuable real estate, such as tens of thousands of cell sites all over the country.Cloud computing isn’t going away by any means. But there’s more pressure on the industry’s Big Three to team up with wireless carriers, so they’re not left out of the burgeoning edge market.“The big players realize that at a minimum they need to partner up with operators to get access to their real-estate property,” Sharma said.Already, AT&T Inc. — the second-largest U.S. wireless carrier — has joined forces with Microsoft Corp. and IBM Corp., two cloud providers.“Our goal is that our partners are wildly successful,” said Sam George, a cloud executive at Microsoft. “If our partners are wildly successful, we’ll be wildly successful. There’s a lot of money to be made for partners.”Amazon and Google declined to comment on their plans.AT&T has hundreds of workers focused on edge computing, and it’s “a core part of our 5G strategy,” said Mo Katibeh, chief marketing officer of AT&T’s business division.“This is one that takes a village.”IBM, meanwhile, is also working with carrier Vodafone Group Plc in Europe.“The networks are essentially themselves becoming a cloud,” said Steve Canepa, IBM’s global managing director for the telecom industry. “The telcos today have a point of presence at the edge, and that becomes a great place to have an extension of the platform.”Cloud providers in China — such as Alibaba Group Holdings Ltd. and Tencent Holdings Ltd. — invested in carrier China Unicom two years ago. And more such investments and partnerships could be coming, Sharma said.For other tech companies, including chipmakers like Intel Corp., the hope is the shift leads to a bigger opportunity for everyone.“We see a rapid convergence between the cloud providers and connectivity providers,” said Caroline Chan, a general manager at Intel. “In our view, it’s a bigger pie.”Other telecom players are angling to team up with both carriers and cloud providers. Crown Castle International Corp., which owns fiber lines as well as more than 40,000 cell towers in the U.S., is in talks with the two camps, said Paul Reddick, a vice president at the company.Crown Castle also is an investor in startup Vapor IO, which is deploying edge computing this year in six metro areas, including Chicago.“I would say this is one that takes a village,” Reddick said.Other projects are already well underway. At CenturyLink Inc., about 100 facilities that used to store telecom equipment are now outfitted with servers. And it’s making them available to corporate customers in sectors like retail and industrial robotics.“We’ve already sold these facilities to a number of customers that need to get that compute closer to the network edge,” said Paul Savill, a senior vice president at CenturyLink. “We’ve seen enough activity in this space that we can confidently build out this infrastructure.”To contact the author of this story: Olga Kharif in Portland at okharif@bloomberg.netTo contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Facebook, Ex-Vodafone CEO Find Common Ground in Meesho
    Market Realist

    Facebook, Ex-Vodafone CEO Find Common Ground in Meesho

    Facebook (FB) has joined with Naspers (NPSNY) and former Vodafone (VOD) CEO Arun Sarin to inject $125 million of fresh capital into Meesho.

  • Bloomberg

    Facebook, Sequoia Bet on Indian Startup in $125 Million Funding Round

    (Bloomberg) -- Facebook Inc. is participating in a $125 million fundraising for an Indian startup that is aiming to bring more commerce to social networks like, well, Facebook.Meesho, based in Bangalore, is what’s known in the tech industry as a social commerce startup, allowing people to build connections online and then sell through services such as Facebook and its WhatsApp and Instagram services. The funding round was led by South Africa’s Naspers Ltd. and also included Sequoia, Shunwei Capital, Venture Highway and Arun Sarin, the former chief executive officer of Vodafone Group Plc.Meesho is part of a crop of new e-commerce companies that are trying to take advantage of social connections to facilitate sales. The startup says that it has a network of more than 2 million “social sellers” in 700 towns across India, focusing on categories like apparel, wellness and electronics.“Our social sellers are small retailers, women, students and retired citizens, with 70% being homemakers who have found financial freedom and a business identity without having to step outside their homes,” said Vidit Aatrey, Meesho co-Founder and CEO.India has become an increasingly competitive market for e-commerce, the last unclaimed major country after Amazon.com Inc. took hold of the U.S. and Alibaba Group Holding Ltd. won China. Amazon is spending billions to gain share in India, while Walmart Inc. paid $16 billion for control of local leader Flipkart Online Service Pvt.Naspers has a history of backing startups in China and India -- and reaping big profits. It invested in China’s gaming giant Tencent Holdings Ltd. and India’s Flipkart, before the Walmart purchase. It led a $1 billion funding round in the Bangalore-based online food company Swiggy in December.Naspers shares have risen 23% this year, valuing the company at about $98 billion.\--With assistance from Loni Prinsloo.To contact the reporter on this story: Saritha Rai in Bangalore at srai33@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Power-Hungry Phone Companies Dial Into Surging Green Bond Market
    Bloomberg

    Power-Hungry Phone Companies Dial Into Surging Green Bond Market

    (Bloomberg) -- Phone carriers are huge energy users, and need to cut emissions. They also face massive bills to build out the next generation of wireless networks. Green bonds promise to help them with both.A steady flow of issuance could be building: Orange SA and BT Group Plc are poised to follow Telefonica SA and Verizon Communications Inc. in selling securities designed to fund environmentally friendly projects. The industry has already completed at least $3 billion of sales since January, its first steps into a sustainable debt market that Bloomberg New Energy Finance estimates could exceed $370 billion this year.The proceeds can help telecom companies replace power-hungry copper wires with fiber-optic cables, or build the 5G networks that promise to make cities, homes and factories more efficient. There’s plenty of investor appetite for this new take on sustainable investing, but there’s a catch: any hint that a bond doesn’t genuinely help the planet can cause some buyers to flee.“Telecoms have to invest a lot. In the long run, having green bonds in place is going to be very important,’’ said Juuso Rantala, who holds Telefonica’s green bond in the 400 million-euro ($449 million) fund he manages at Aktia Asset Management Ltd. in Finland. “If I find out that I cannot trust the company in the case of green bonds, I cannot trust them in many other ways too. If I cannot trust them, I don’t invest.’’The securities show how green debt is expanding beyond its original universe of the clean energy industry. Beef supplier Marfrig Global Foods SA and Australian retailer Woolworths Group Ltd. have tapped this market to help their operations become more environmentally friendly.For carriers, the task is urgent. The communications industry accounts for about 10% of global electricity demand, and that could exceed 20% by 2030 as demand for data balloons, according to Huawei Technologies Co.Telecom companies have ways to clean up their act. For example, replacing copper with glass wires would use 85% less energy, according to Telefonica. And 5G can enable a range of environmental benefits by allowing smart buildings to monitor heating, connected warehouses to optimize their logistics and power grids to better allocate electricity.But these companies are already staggering under a mountain of debt from, among other things, buying 5G licenses. They’ll need to make sure they can keep their borrowing costs low and tap investors when needed.That’s where green bonds can help: the interest costs are about the same as on these companies’ conventional securities, but they offer the opportunity to access a wider pool of investors.The share of funds focused on socially responsible investing, which includes environmental projects, has risen 34% over the last two years, and now accounts for $30.7 trillion of assets globally, according to the investor group Global Sustainable Investment Alliance.“Many more green telco bonds are likely,” Morgan Stanley analysts led by Emmet Kelly wrote in June. “Demand from funds that have incorporated sustainability into their investment framework has been key.’’Telefonica, based in Madrid, is a good example. Demand for the issue, which priced in January, was significant: the company received five times the orders than what was available for sale, and obtained a spread more than the mid-swap rate that was about 25 basis points lower than initial indications.The yield on the 1 billion-euro 5-year security is in line with the rest of its curve, Bloomberg data show, indicating it didn’t have to pay a premium to tap demand for sustainable credit. It’s a similar story for Verizon and Vodafone Group Plc.Orange and BT Group are paying attention -- they have inserted clauses into their Eurobond prospectuses which would let them issue green bonds in the near future. And Deutsche Telekom AG is monitoring the surging market closely, said a spokesman.For investors, the risks go beyond what’s expected for any fixed-income asset. Buyers also have consider just how green these bonds are.“The question is whether or not a bond offers a real energy efficiency gain or overall gain for the environment,’’ said Arnaud-Guilhem Lamy, who holds telecom securities in his 340 million-euro ($381 million) green bond fund at BNP Paribas Asset Management in Paris. “If we think it’s insufficient, we would sell.’’For a start, there’s always the possibility that this new breed of green-bond borrowers divert proceeds to inappropriate purposes, including pooling them into general funds. Though monitoring groups such as credit rating firms can discourage such behavior, it’s something investors need to watch.But 5G presents a particular environmental paradox.Internet-of-things technologies will connect billions more devices and require many more antennas, so 5G will initially use more power than 4G, according to Sustainalytics, an independent corporate sustainability research firm. This complicates the idea that 5G can be a green investment.However, Sustainalytics estimates the energy savings from 5G outweigh the extra emissions to deploy the new tech by a ratio of 5 to 1. The firm’s analysis of the Verizon bond issue, which included 5G deployment among the potential use of proceeds, found that it was a credible candidate for green financing.It’s a good thing, because Verizon plans on returning to this corner of the bond market. It looks like it will be welcome, too – its $1 billion issue of 10-year green debt was eight times oversubscribed within six hours of being offered for sale, said Jim Gowen, head of supply chain and sustainability for the U.S. carrier.“It was far beyond our wildest expectations,” Gowen said. “We are very interested in doing another one.’’\--With assistance from Paul Cohen and Lyubov Pronina.To contact the reporter on this story: Thomas Seal in London at tseal@bloomberg.netTo contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Jennifer RyanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Why Vodafone Shares Rose 11% in July
    Motley Fool

    Why Vodafone Shares Rose 11% in July

    The company announced passable first-quarter results and an interesting reorganization.