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Vodafone Group plc (VOD)

  • Tue, Nov. 24, 6:16 PM
    • Liberty Global (LBTYA -1.8%) can see more expansion coming in Europe, but the company won't pursue growth for growth's sake, says chief Mike Fries.
    • “We’re not motivated by building empires,” Fries says. “We’re motivated by creating value.”
    • Yet as empire-building goes, the company is taking on Caribbean-focused Cable & Wireless (OTCPK:CWIXF) for $8B (including debt), one of well over a dozen $1B-plus acquisitions the company has completed over the past 20 years, with an accumulation of debt to go with that.
    • Its equation could have changed entirely with talks over a massive combination with Vodafone (NASDAQ:VOD) -- before they turned into talks over an asset swap and ultimately fizzled. "We never say never," says Fries, "but there is nothing happening at the moment."
    • And while John Malone (who holds 24% of voting rights) is known for big dealings, Fries says he leaves the company to pursue its course: “I’ve been chief executive for 10 years and everything we’ve done has been self-created. We have the benefit of [Malone’s] strategic insight and guidance but he is not a puppeteer.”
    • Previously: Liberty Global unit selling customers to pursue OK for Belgian takeover (Nov. 20 2015)
    • Previously: Malone tripling stake in Lions Gate through Discovery, Liberty Global (Nov. 10 2015)
    | Tue, Nov. 24, 6:16 PM | Comment!
  • Wed, Oct. 28, 10:09 AM
    • BT Group (NYSE:BT) is up 3.5% in U.S. trading following the UK's provisional clearance of its £12.5B merger with mobile market leader EE.
    • The telecom giant had made its case to regulators for the takeover in early May. Opponents, particularly Vodafone (NASDAQ:VOD), have been vocal about the combination of the UK's biggest fixed-line telecom with its biggest mobile operator.
    • And despite a harder-line stance by EU Competition Commissioner Margrethe Vestager -- whose opposition led to TeliaSonera and Telenor calling off a Danish merger -- the EU's digital economy commissioner, Guenther Oettinger, thinks consolidation will continue to run: "I believe the consolidation process will continue - we have rather too many than too few companies in Europe."
    • As for Vestager's approach: "She sets a lot of store by variety of offerings, by competition, that's the one important factor. The other is that we need competitive companies who are big enough in the global competitive context."
    • Also up today: EE owners Orange (ORAN +0.5%) and Deutsche Telekom (OTCQX:DTEGY +1%).
    • Previously: TeliaSonera, Telenor call off Danish merger as regulators balk (Sep. 11 2015)
    | Wed, Oct. 28, 10:09 AM | Comment!
  • Fri, Oct. 9, 10:06 AM
    • BT Group (BT -0.6%) is keeping up the pressure in its response to a strategic review by UK telecom regulator Ofcom, saying that there's no case for divesting its Openreach wholesale access business -- a move it says would hurt the UK's "digital health" -- and pointing regulators instead toward the dominance of pay-TV rival Sky (OTCQX:SKYAY -0.9%).
    • The regulator is conducting its first strategic review of the sector in 10 years amid some key and rapid change.
    • BT in February agreed to a $19B acquisition of EE, the UK's top mobile firm, raising vocal calls from competitors (especially Vodafone) over network access. Liberty Global (LBTYA +0.3%) and Vodafone (VOD +0.3%) discussed -- and then dropped -- a merger or asset swap in Europe. And the UK's second- and fourth-largest mobile firms are pursuing a $15.7B merger.
    • This summer, a determined BT CEO Gavin Patterson threatened the specter of a decade of litigation over Openreach if the company were forced to unload it. Now it says that the existing "functional separation" of its units has served the UK "exceptionally well over the past decade."
    • Elsewhere, Citigroup today reiterated its Neutral rating on BT Group.
    • Previously: BT Group up as Societe Generale reiterates Buy rating (Sep. 23 2015)
    • Previously: BT Group recommits to 10M homes with ultrafast broadband by 2020 (Sep. 22 2015)
    • Previously: Vodafone, rivals renew call for BT Openreach split (Sep. 21 2015)
    | Fri, Oct. 9, 10:06 AM | Comment!
  • Wed, Oct. 7, 12:45 PM
    • The breakdown of talks over a tie-up with Liberty Global (LBTYA -0.3%) means that Vodafone (VOD -1.1%) and CEO Vittorio Colao will need a more unglamorous strategy of cable and network investments to start paying off.
    • The carrier is now getting calls from bankers to go forward with floating its India mobile business. Management will be focused on running its biggest markets to return to steady growth.
    • "We really need to see an operational turnaround in Europe in this fiscal year," says Axa's Bruno Grandsard. "That is priority number 1, 2, and 3, including the integration of cable assets in Germany and Spain."
    • Vodafone had bought Kabel Deutschland in Germany and Ono in Spain to compete with incumbents in those countries. Germany is Vodafone's biggest sales market, and Kabel Deutschland has been coveted by Liberty Global in talks about European asset swaps.
    • Despite the breakdown of those talks, observers inside and outside Vodafone think Liberty Global will come calling again eventually, possibly a year from now, with the promise of some €20B in cost savings, largely in the UK and Germany.
    | Wed, Oct. 7, 12:45 PM | Comment!
  • Mon, Sep. 28, 9:39 AM
    • Vodafone (VOD -3.1%) and Liberty Global (LBTYA -3.7%) were among early premarket sliders in telecom today after the two broke off discussions over swapping European assets.
    • The cost of insuring Vodafone's debt dropped the most in nearly four months, and bonds of Liberty Global's units fell to their own records. Virgin Media (a likely Vodafone target) saw its January 2025 bonds slip to 92.8c/euro, lowest since issuance, while Germany's Unitymedia bonds fell 5.1 cents to a record low 84.4 cents.
    • Barclays reiterated its Overweight rating on the shares with a 250-pence price target. Shares are down 3.7% in London to 209.7p, implying a 19% upside in Barclays' target.
    • Previously: Vodafone ends talks with Liberty Global over asset swaps (Sep. 28 2015)
    | Mon, Sep. 28, 9:39 AM | Comment!
  • Mon, Sep. 28, 2:48 AM
    • Vodafone (NASDAQ:VOD) says it's called off talks with Liberty Global (NASDAQ:LBTYA) over a swap of assets.
    • Amid rumors of an outright merger earlier this summer, the two confirmed they were talking about swapping some European businesses, but the talks faced challenges from the outset and are over for now.
    • The companies never specified which assets -- though the best fit seemed to be where they had heavy overlap: in Germany, the UK and the Netherlands. But the UK is Liberty's largest market, and Germany is Vodafone's biggest sales market, and it seemed increasingly unlikely the two would bail out of those markets.
    • Liberty had long coveted Vodafone's bigger Kabel Deutschland business, while Vodafone probably was looking at Liberty's Virgin Media.
    • Previously: Vodafone -2.3% as Liberty Global tie-up seems troubled (Sep. 15 2015)
    • Previously: Summer's end may bring resolution for Vodafone, Liberty (Aug. 17 2015)
    | Mon, Sep. 28, 2:48 AM | 5 Comments
  • Mon, Sep. 21, 10:38 AM
    • Vodafone (VOD +0.5%) and other rivals of BT Group (BT -0.3%) have renewed their call for radical reform of the UK telecom market, including a competition investigation and a split of wholesale business Openreach from BT Group proper.
    • In an open letter in the Financial Times, chiefs of Vodafone UK, Sky (OTCQX:SKYAY), TalkTalk (OTC:TKTCY) and Daisy Group claim that British regulator Ofcom has found serious problems in the ownership of the national network by BT Openreach.
    • For its part, BT Group says that it continues to invest billions in Openreach and that the business is exceeding service targets set by Ofcom.
    • Meanwhile, Vodafone's tie-up talks with Liberty Global (LBTYA +0.6%) are snagging over complicated tax arrangements at Liberty and its Virgin Media cable net, The Telegraph reported. The companies have discussed swapping assets, but Liberty reportedly depends on Virgin Media's billions in losses to lower its tax burden.
    | Mon, Sep. 21, 10:38 AM | Comment!
  • Tue, Sep. 15, 9:32 AM
    • Vodafone (NASDAQ:VOD) is off 2.3% amid the newly tougher regulatory scheme that likely has put a kibosh on a merger with Liberty Global (NASDAQ:LBTYA).
    • A shift in approach to the hard line by European Commission competition chief Margrethe Vestager recently got TeliaSonera and Telenor to call off a merger of their Danish operators. And Liberty is offering up fresh concessions in an effort to seal its effort to buy KPN's Belgian operator Base.
    • John Malone is still looking for common ground with Vodafone over some kind of tie-up, he tells Bloomberg, as those talks seem to stall. Discussions about a full merger that initially moved stocks turned to talks over an asset swap in Europe, as Vodafone insists it's not talking about the full deal.
    • "Obviously there’s a price at which Liberty Global could be bought," Malone said. "I don’t believe that that’s likely for the other side to get there -- an outright purchase of the whole company. Other than that, it’s a question of could you figure out some way to live together."
    • Vodafone chief Vittorio Colao should "retire" now that the merger talks have fallen apart, says telecom analyst Neil Campling of Aviate Global. Asset swaps seem unlikely in key markets the UK and Germany, he says. “While we can find reasons to invest in Liberty Global on a standalone basis, the same cannot be said for Vodafone," he says. "What's next? Vittorio, surely, will retire and head for the sunshine/ski slope. He should.”
    • Meanwhile, Vodafone India has begun talks with IBM to renew a 660B-rupee ($1B) outsourcing contract that expires in June. Other vendors, including Wipro, Tata Consultancy, Infosys and Tech Mahindra, could push for the deal.
    | Tue, Sep. 15, 9:32 AM | 1 Comment
  • Fri, Sep. 4, 1:44 PM
    | Fri, Sep. 4, 1:44 PM | 4 Comments
  • Mon, Aug. 17, 2:04 PM
    • Amid discussion and plenty of speculation about how or when Vodafone (NASDAQ:VOD) and Liberty Global (LBTYA +1.2%) are going to get together, some analysts are looking to the coming month for clarity.
    • The timetable might move based on Vodafone's actions for emerging-market assets, and how they are split from European assets.
    • While the two companies confirmed discussions earlier this summer, they squelched talk of an outright purchase/merger, saying instead that they were talking about swapping assets.
    • Nomura's James Britton sees an update coming soon on the negotiations. "The upside for both entities is clear to see and we remain confident that an offer for Vodafone Europe, which leaves Vodafone shareholders with a considerable interest in the premier convergence provider (Liberty) in Europe, will be an enticing prospect for Vodafone's board," he writes. Nomura has been on record saying an outright merger would look more attractive than an asset swap.
    • Though Vodafone has stated the companies are not considering a merger, we do not believe this is necessarily a permanent state of affairs," Citigroup's Simon Weeden wrote last month, saying the "cleanest and lowest risk" path to synergy was via "a full acquisition of Liberty by Vodafone.
    • Previously: Liberty Global, Vodafone see better rules environment for swaps (Jun. 12 2015)
    • Previously: Liberty Global CEO: Need mobile services to complete quad-play (Jun. 09 2015)
    | Mon, Aug. 17, 2:04 PM | 3 Comments
  • Wed, Jul. 8, 11:58 PM
    • Europe is leading the world in telecoms moving to "quad-play" bundling -- adding wireless to fixed-line telephones, broadband and pay TV -- which should mean a big opportunity for firms to drive margin improvement and build some competitive moats, says Morningstar's Allan Nichols.
    • Both in-country consolidations and convergence mergers are helping build moats, he says -- the latter because it tends to lower churn as people subscribe to more services. And with lower churn, companies can lower subscriber acquisition cost.
    • His favorites in the space: Telefonica (NYSE:TEF), already a leader in triple-play and convergence in Spain and Brazil; Orange (NYSE:ORAN), leading a fiber buildout in France; and Millicom International Cellular (OTCPK:MIICF), with a high organic growth rate but low EV/EBITDA.
    • About 16% of Virgin Media customers were taking four services when it was acquired by Liberty Global (NASDAQ:LBTYA) in summer 2013, which Nichols thinks was a key factor. Liberty is now offering wireless services as an MVNO in several markets, and has agreed to buy Royal KPN's (OTCPK:KKPNY) wireless business Base.
    • From the wireless direction, Vodafone (NASDAQ:VOD) is also acquiring assets to offer other services, particularly after it bought Cable & Wireless Worldwide in the UK, and later Kabel Deutschland in Germany.
    • Europe would benefit from more cross-border mergers, Nichols says, but they're unlikely due to political constraints, and German cable consolidation is likely to run into regulatory opposition as well.
    | Wed, Jul. 8, 11:58 PM | Comment!
  • Wed, Jun. 24, 10:32 AM
    • European cable leader Liberty Global (NASDAQ:LBTYA) is going to look for growth in the 12 continental markets it already occupies, CEO Michael Fries tells Germany's Handelsblatt, even as the company has acknowledged discussing asset swaps with Vodafone (NASDAQ:VOD).
    • "There are not many more markets, like Scandinavia, where we are not active," Fries said. "Spain, Portugal and France do not interest us."
    • The asset swap talks have focused on Liberty's and Vodafone's two key overlapping markets -- the UK and Germany -- but the UK is Vodafone's home and Liberty's largest market, while Germany is Vodafone's biggest sales market.
    • Meanwhile, in Germany, Fries hinted Liberty could swallow up more ground -- "We could certainly look at these," companies like Telecolumbus, Pepcom or Primacom.
    • But he said it didn't need to buy assets to grow in its existing markets. "Our networks reach 50 million households in Europe. However, only 25 million households are customers of ours so far. We can tap the others without great additional costs."
    • Previously: Vodafone, Liberty merger "far more attractive" than asset swap: Nomura (Jun. 23 2015)
    • Previously: Liberty Global, Vodafone see better rules environment for swaps (Jun. 12 2015)
    | Wed, Jun. 24, 10:32 AM | 3 Comments
  • Tue, Jun. 23, 8:03 PM
    • Vivendi (OTCPK:VIVHY) and Vodafone (NASDAQ:VOD) reportedly approached Twenty-First Century Fox (FOX, FOXA) about giving up its 39% stake in Sky (OTCQX:SKYAY) -- but were rebuffed after the Murdochs started asking for a 73% premium.
    • Both companies have been linked with the British satellite broadcaster in the past. Macquarie noted that instead of setting up an asset swap with Liberty Global, a "more rational" play for Vodafone would be a content play with Sky -- and one in keeping with its 2013 buy of Kabel Deutschland.
    • Meanwhile, Vivendi was reported to have made a bid for Sky in April, but denied that.
    • That leaves speculation that Fox might want to buy the rest of Sky, having failed that in 2010 when the UK phone hacking scandal got in the way, but Sanford Bernstein's Claudio Aspersi doubts that: “If Fox is hoping to make another run at Sky in the near-term (in spite of the political opposition which likely remains high), we don't understand why they'd anchor the bid at such a high price."
    • Previously: Vodafone -2.2% after dampening Liberty merger talk (Jun. 05 2015)
    • Previously: Reuters: Vivendi may be eyeing £28B deal for Sky (Apr. 08 2015)
    | Tue, Jun. 23, 8:03 PM | 1 Comment
  • Tue, Jun. 23, 12:23 PM
    • South Africa is near a deal on the sale of its $2.3B (27.7B rand) stake in Vodacom (OTC:VODAF), the Johannesburg-based unit of Vodafone (NASDAQ:VOD), Bloomberg reports.
    • The government is likely to sell all of a 13.91% stake in Vodacom to its state-owned Public Investment Corp. in stages, and apply the proceeds to a rescue package for state-owned power utility Eskom Holdings SOC, which has engineered blackouts amid a funding shortfall.
    • Combined with the PIC's existing stake in Vodacom, it could become the second-largest shareholder behind Vodafone's 65% stake.
    • Vodacom is up 2% in Johannesburg; Vodafone ADRs are up 0.8% on Nasdaq.
    | Tue, Jun. 23, 12:23 PM | 1 Comment
  • Tue, Jun. 23, 3:19 AM
    • Vodafone (NASDAQ:VOD) and Liberty Global's (NASDAQ:LBTYA) discussions around asset swaps will help establish that such scenarios are far less attractive than simply combining all their European assets, Nomura says.
    • The companies have potential to create "an unrivaled integrated communications provider across Europe."
    • Total cost synergies could be $32.6B.
    • An asset exchange, on the other hand, will be difficult given the mismatch of their asset valuations.
    • Raises Vodafone to Buy.
    • Previously: Confirmed: Vodafone considering asset swap with Liberty (Jun. 5)
    • Previously: Vodafone -2.2% after dampening Liberty merger talk (Jun. 5)
    | Tue, Jun. 23, 3:19 AM | 2 Comments
  • Mon, Jun. 22, 12:13 PM
    • With consolidation in the air, telecom players are trading significantly higher today Europe-wide.
    • Telefonica (TEF +4.5%), Telecom Italia (TI +1.9%), Orange (ORAN +8.2%), Vodafone (VOD +1.8%), KPN (OTCPK:KKPNY +5.5%), Deutsche Telekom (OTCQX:DTEGY +5.4%), Belgacom (OTCPK:BGAOY +2.7%), TeliaSonera (OTCPK:TLSNY +1.9%) and Pharol (OTCPK:PTGCY +8.5%) are all among firms getting a punch up today.
    • The richness of the proposed deal by Numericable-SFR (Altice, OTC:ATCEY) for Bouygues Telecom (OTCPK:BOUYY) -- at €10B, it suggests one of the highest regional industry EBITDA multiples (14.4x) in years -- may be lifting firms in a consolidation-friendly atmosphere, even with the hurdles this deal has to overcome.
    • French regulators have gone on the record against the deal, calling for investment: “Consolidation isn’t advisable for the sector,” says econ minister Emmanuel Macron. “Employment, investment and giving customers the best possible service should be the priority.”
    • In addition, a reluctant Martin Bouygues would need to be convinced to change his mind and sell.
    • Previously: Altice confirms Bouygues Telecom bid (Jun. 22 2015)
    | Mon, Jun. 22, 12:13 PM | 2 Comments
Company Description
Vodafone Group PLC is engaged in providing voice and data communications services for all types of customers. The Company has presence in Europe, the Middle East, Africa, the Asia Pacific region and the United States.