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Emerging markets help Vodaphone recovery [Western Mail (Wales)]
[November 10, 2014]

Emerging markets help Vodaphone recovery [Western Mail (Wales)]


(Western Mail (Wales) Via Acquire Media NewsEdge) MOBILE phone giant Vodafone is expected to show steady progress when it reports half-year results tomorrow as it battles to revive its European arm through a largescale network upgrade.

The group is due to post a 12% fall in earnings to Pounds 5.8bn as it ploughs Pounds 19bn into its Project Spring plan, which will provide wider 4G coverage in Europe and 3G coverage in emerging markets.

It is being funded through Vodafone's Pounds 78bn sale of its 45% stake in Verizon Wireless to joint venture partner Verizon.

One of the biggest transactions in corporate history, it resulted in around Pounds 50bn in shares and cash being returned to shareholders.

The group has been growing strongly in emerging markets such as India, but its European arm is still weighed down by economic conditions, competition and regulator-imposed price changes.

Growing demand for 4G services has given a boost to Vodafone's recovery hopes in Europe, as the firm has said these customers use roughly twice as much data as 3G customers.

It already has deals to stream services from Spotify, Netflix and Sky Sports, and is reportedly close to unveiling another deal in the UK to offer access to Sky's NowTV pay-as-you-go service, which includes television box sets and 13 entertainment channels such as Sky One and Sky Atlantic.



The company has now launched 4G in all its major European markets, as well as South Africa, Australia and New Zealand.

The mobile phone giant said earlier in the year its performance in several key European markets, including the UK and Germany, were showing signs of stabilisation.


Brokers at Citi agree, adding that they expect group service revenues to decline 2.8% in the second quarter compared to a 4.2% fall in the first three months of its financial year.

By contrast the Indian market in the first quarter increased 125% year-on-year, and at the end of the year Vodafone had 52 million data customers in India alone, with seven million being 3G data customers.

The group forecasts full-year earnings of between Pounds 11.4bn to Pounds 11.9bn.

Vodafone is this year celebrating 30 years since it was first launched as a "portable and mobile public telecommunications service", marking the start of the mobile phone revolution in Britain.

Now one of the biggest companies in the world, it was originally part of the Racal Electronics Group, which announced the name of its new venture on March 22, 1984, after winning a bid for the private sector UK cellular licence.

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