What are Vodafone Shares Worth?

Vodafone has finished its core restructuring, becoming a diversified operator offering converged mobile and fixed-line services. We share the analyst view

Allan C. Nichols, CFA 14 June, 2017 | 9:43AM

With the completion of Project Spring, Vodafone (VOD) has finished its core restructuring. It successfully transitioned from one of the world’s largest wireless-only telecom firms to a diversified operator offering converged mobile and fixed-line services in most of its developed markets. We think this was an important transition, as Europe is rapidly moving into a converged world.

The acquisitions of Kabel Deutschland in Germany, Ono in Spain, and Cable & Wireless Worldwide in the United Kingdom provide Vodafone with some key fixed-line infrastructure in three of its biggest European markets. The firm has also laid significant amounts of its own fibre in Italy and has signed an agreement with Enel, the electric utility, to use its fibre in many other areas. Management has now moved to a second level of reorganization.

In the Netherlands, it completed the merger of its wireless business with Ziggo, Liberty Global’s Dutch cable business, in a 50/50 joint venture. Also, it has agreed to merge its Indian business with Idea Cellular, which will make it the largest wireless operator in India and provides significant cost savings. We think all these deals position Vodafone to compete more effectively. The company has also dramatically increased its enterprise business, which now accounts for 27.7% of revenue and tends to have long-term contracts.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Vodafone Group PLC109.60 GBX-3.01

About Author

Allan C. Nichols, CFA  is a senior stock analyst and international investing specialist with Morningstar.

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