Vodafone Group Plc
) has reportedly disclosed its investment plans for Europe, in
particular Italy. The company aims to dedicate a large part of
its planned €6 billion investment to Italy. This leading telecom
company plans to buy the full stake of Vodafone Italia after the
influx of capital from its 45% stake sale in Verizone Wireless,
the wireless division of
Verizon Communications Inc.
Vodafone, the world's largest telecom service provider after
) is pursuing significant infrastructural development to expand
its market presence in Europe and emerging markets. The company
is mulling over buying Germany's biggest cable operator Kabel
Deutschland Holding AG for around €7.7 billion. It is also eyeing
the Italian fixed line operator Fastweb S.P.A in an attempt to
bolster its landline and Internet assets.
Going forward, Vodafone is also working on spectrum
acquisitions and secured spectrum licensing in the Netherlands,
Ireland and India. The company is accelerating its 4G expansion
and targets to cover five European markets in fiscal 2014. In Jun
2013, Vodafone launched LTE in Australia. Ongoing efforts to
upgrade the existing network infrastructure should result in
higher network efficiency and increased mobile data capacity.
In terms of product promotion, Vodafone is gaining significant
momentum from its marketing its new pricing plan, Vodafone Red,
which incorporates unlimited voice and SMS, increased roaming
services, shared plans, early upgrades, cloud and other value
added services. The company expanded Vodafone Red in 14 European
markets with 4.1 million customers, representing its largest
multi national marketing campaign for five years. The company
aims to reach 10 million Vodafone Red customers by Mar 2014 with
attempts to capture opportunities in emerging markets.
We believe the prospect of mobile data is better in emerging
markets where Vodafone is expanding its presence through
partner-market agreements. The alliance between Vodafone and
Polkomtel is expected to enhance presence of the former in
Eastern Europe, without any major investment, as the company will
be offering its services via the local partner's network.
Further, the company has also joined hands with
China Mobile Limited
) to form a consortium to bid for mobile license in Myanmar. The
telecom giants are aiming to secure one of the two telecom
licenses to rollout a nationwide telecom network in Myanmar.
Given these positives, we believe the company will continue its
growth trajectory despite economic overhangs.
Vodafone currently has a Zacks Rank #3 (Hold).
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