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Vodafone Group plc (VOD)

  • Fri, Jul. 24, 9:20 PM
    • Following Vodafone's (VOD +2%) Q1 results, in its earnings call today (transcript), CEO Vittorio Colao elaborated on the company's discomfort with the power of a consolidated BT Group/EE combo in the UK as regulatory questions piled up.
    • Vodafone and industry peers have called for a breakup of BT Group -- UK regulator Ofcom is considering a split of Openreach -- and Colao said the right rules could prompt investment.
    • "So I think the regulators should have a serious look at the possibility of creating a true modern infrastructure company to serve the country. And Openreach could be that one. And, ideally, Vodafone could even be an investor in fiber like we are in other places, if it was a genuine thing."
    • Colao also complained about broadcasters like Sky paying heavy fees to get exclusive programming rights that are enforced with some close-together geographic borders in Europe, a subject that touches on the EU's antitrust action against major Hollywood studios.
    • "Minimum guarantees are my enemy and we need to convince regulators they are anticompetitive," Colao said. "But I think the behavior of content owners will be under a lot of scrutiny in coming years."
    • Previously: BT CEO threatens decade of litigation if forced to divest wholesale unit (Jul. 20 2015)
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  • Fri, Jul. 24, 9:27 AM
    • Vodafone (NASDAQ:VOD) is up 2.7% premarket after a quarterly report where growth sped up slightly on revenues held down by currency changes.
    • Revenues were down 0.9%, but increased 3.3% excluding forex and M&A. Organic service revenues (excluding M&A, forex and handset sales) was up 0.8%, boosted by 6.1% gains in its Africa/Middle East/Asia Pacific geo. India provided a regional boost with 6.9% gains.
    • European organic service revenue fell 1.5% but comparative recovery was apparent across markets: Germany -1.2%; Italy -2%; Spain -5.5%; UK +0.2%.
    • The company reported 24.1M 4G customers across 18 markets.
    • CEO Vittorio Colao called it "a good start to the year. Our emerging markets have maintained their strong momentum and more of our European businesses are returning to growth, as customer demand for 4G and data takes off."
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  • Tue, Jul. 21, 9:07 AM
    • Vodafone (NASDAQ:VOD) is down 1.1% premarket in U.S. trading following news of a shakeup of its European management even as it talks with Liberty Global about swapping assets on the continent.
    • European chief Philipp Humm will step down and leave Vodafone, and the chiefs of Vodafone's most crucial markets -- Germany, Italy, the UK and Spain -- will report directly to CEO Vittorio Colao as part of a group executive committee.
    • Colao says this will "simplify and streamline the management of our largest European markets and accelerate our strategic plans in those countries" as convergence quickens and the company proceeds with organic investment.
    • Meanwhile, Grupo Santander reiterated its Underweight rating on Vodafone. Santander has a price target on London shares of 215 pence; shares are down 0.9% in London, to 236.9 pence.
    • Nomura has reiterated its Buy rating today.
    • Previously: Vodafone up as firms counter Goldman, reiterate Buy ratings (Jul. 16 2015)
    • Previously: Vodafone, Liberty merger "far more attractive" than asset swap: Nomura (Jun. 23 2015)
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  • Mon, Jul. 20, 2:20 PM
    • Gavin Patterson, CEO of BT Group (NYSE:BT), used an interview to threaten the prospect of a decade of lawsuits and a standstill to broadband investment if the UK's telecom regulator forces it to sell its Openreach wholesale unit.
    • "This is a commercial enterprise and if there’s uncertainty we will defend the rights of our shareholders, undoubtedly," he said to The Telegraph. "At the end of it, and if we’re meant to be looking at the next 10 years, what do you want to look back on? Do you want to look back at 10 years of litigation and arguments?”
    • Ofcom, the UK watchdog, had floated the idea last week that BT could be forced to spin off the wholesale business to boost competition, amid rivals like TalkTalk, Vodafone (NASDAQ:VOD) and (especially) Sky arguing for a breakup or restrictions on BT even as it pursues acquiring EE, Britain's largest wireless provider.
    • Patterson calls those stances "quite staggering hypocrisy" from providers who pushed for lower prices rather than investing in last-mile networks.
    • While a total to halt to broadband investment is part of BT's threat, the company says it's going forward with deploying technology for now.
    • Previously: BT could be broken up under U.K. market shake-up (Jul. 16 2015)
    • Previously: Vodafone returns to UK broadband with new offering (Jun. 10 2015)
    • Previously: UK regulator fast-tracking review of BT Group/EE merger (Jun. 09 2015)
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  • Thu, Jul. 16, 10:55 AM
    • Vodafone (NASDAQ:VOD) is up 0.9% in U.S. trading as it has its Overweight/Outperform rating reiterated by both JPMorgan Chase and Credit Suisse today.
    • Credit Suisse has a price target on London shares of 250 pence.
    • Nomura has reiterated its Buy rating as well, with a 290 pence price target. Shares are currently +1.1% to 238.3 pence in London.
    • In its action yesterday, Goldman Sachs had downgraded to Neutral with a price target on ADRs of $39, down from $41, and a London price target of 250 pence, down from 275p. The firm removed Vodafone from its Pan-Europe Buy list. ADRs closed at $36.99 yesterday.
    • Previously: Vodafone -1.1%; pulled off Goldman's Pan-Europe Buy List (Jul. 15 2015)
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  • Wed, Jul. 15, 10:12 AM
    • Vodafone (NASDAQ:VOD) is 1.1% lower as Goldman Sachs removes it from its Pan-Europe Buy List, downgrading the stock to Neutral from Buy.
    • The firm has a price target of 250 pence, down from 275 pence; shares are trading down 1% in London at 235.55 pence.
    • Amid recent talk about an asset swap with Liberty Global (LBTYA +0.5%), Goldman's Tim Boddy sees the risk/reward profile as "more binary" with Vodafone still set to benefit from "'double' consolidation of both mobile and fixed-mobile operators ... We see attractive operational gearing to this growth recovery given its low margins."
    • M&A is still a very valid option and if management reconsiders its structure, "we believe a number of other potential acquirers could take interest in its remaining assets," he says.
  • Thu, Jul. 9, 12:05 PM
    • Vodafone (VOD +1%) has signed a deal with Mediaset to offer its pay-TV content to Vodafone Italy customers.
    • The content will carry through Vodafone's 4G network, covering 88% of Italy's population. Similarly, competitor Telecom Italia (NYSE:TI) offers its customers full content of Sky Italia (OTCQX:SKYAY).
    • An initial flagship bundle combining voice and data with TV series, sports and movies is available to Vodafone subscribers at €39/month (about $43), with lower-priced packages available.
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  • 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.
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  • Wed, Jul. 8, 11:42 PM
    • Vodafone (NASDAQ:VOD) says all Australian 4G customers are now on an upgraded core network that it's been working on with Ericsson, which should ease future expansion.
    • The company's 3G customers are still migrating, it said: "We're 70-80% done ... we're moving customer segment by customer segment over to the core."
    • The move should lower costs overall for Vodafone, particularly as it pursues expansion -- and it will receive A$20M in the next three years for expanding into the country's more remote regions.
    • Later this year, Vodafone plans to implement voice-over-LTE to make 4G the default for voice calls, rather than phones falling back to 3G.
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  • Tue, Jun. 30, 4:14 AM
    • Bringing months of negotiations to an end, European lawmakers have agreed to a final proposal to scrap roaming charges within the 28-member union as of June 2017 and introduce rules on "net neutrality."
    • Unlike stricter laws in the U.S., the EU will allow specialized services for things such as streaming live TV as long as it does not hinder other customers - a move likely to be welcomed by telecoms groups.
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  • 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)
  • 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)
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  • 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.
    | 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)
  • 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)
  • Fri, Jun. 19, 10:59 AM
    • Vodafone (VOD +0.3%) has tapped Hannes Ametsreiter -- the outgoing CEO of Telekom Austria (OTCPK:TKAGY) -- as its chief in Germany, Vodafone's biggest market by sales. He'll start Oct. 1.
    • That move comes amid chatter about possible Vodafone asset swaps with Liberty Global that has focused on Germany, with a heavy overlap between the two.
    • Vodafone's German revenue declined more than 3% last quarter as the company lost subscribers to Deutsche Telekom (OTCQX:DTEGY). Vodafone's Kabel Deutschland would love to get Liberty Global's German assets to compete better with DT in broadband.
    • Previously: Liberty Global, Vodafone see better rules environment for swaps (Jun. 12 2015)
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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.