Vodafone Group plc
) UK division has inked a promotional deal with
) that will allow the telecom giant's 4G customers free access to
video streaming contents for a period of six months. The
promotional offer is expected to be launched in Jul 2014 and will
end in December.
To avail the offer, Vodafone's customers will have to subscribe
to its Red 4G plan, which starts at £26 ($44) per month and
provides 3GB of consumable data. The data consumed on streaming
Netflix content will not be counted as part of the 3GB limit. The
Vodafone-Netflix deal will add some more flare to its already
impressive 4G plans, which provides additional music streaming
service from Spotify Limited and Sky Sports mobile TV facility.
Online video streaming service providers, such as Netflix Inc.,
Hulu.com, YouTube etc. have gained popularity in the U.S. by
offering cheaper sources of programming. Netflix has been planning
to expand to tap the rapidly growing markets in Europe as well. The
deal with Vodafone is expected to boost the company's UK business
which was launched in 2012. Netflix currently has 48 million
subscribers in 40 different countries.
Notably, Vodafone introduced its 4G service in UK last year and
has subsequently expanded its network coverage to 233 cities, towns
and communities across the country. The telecom behemoth plans to
expand its network to 98% of the UK population by the end of
However, Vodafone lags behind Deutsche Telekom and
) owned Everything Everywhere's 4G service, which plans to cover
90% of the population by the end of 2014. The carrier banks on its
superior network, wide range of devices and service quality to
promote its services.
Another rival O2 owned by
), which remains behind Vodafone in 4G network deployment, has
covered 41% of the UK population with 191 towns and cities under
its infrastructure base. However, the Spanish giant is leaving no
stone unturned by countering its slow network growth with special
offers, money back policy and free concert tickets.
We believe Vodafone's tie up with Netflix will provide the
telecom giant an added advantage over its rivals. The pact will
allow the Vodafone customers to enjoy various TV content and
programs at no additional cost. However, the carrier needs to ramp
up its network facility if it seeks to hold on to its edge in 4G
Vodafone currently carries a Zacks Rank #3 (Hold).
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