Displaying items by tag: Vodafone Group

Vodafone India struggles with ‘intense price competition’

Written on Sunday, 11 February 2018 09:46

Vodafone Group’s financial results for the quarter ended 31 December 2017 show a 3.6% decline year-on-year to €11.8 billion, due mostly to the removal of figures relating to its Netherlands Vodafone Ziggo joint venture from overall earnings. The company’s India unit was heavily affected by “intense price competition” and new regulation on termination fees.

Although India is excluded from Vodafone Group’s overall figures, the company’s pending merger with Indian operator Idea Cellular means it continues to provide updates for the unit. Vodafone India’s revenue in fiscal Q3 declined 26.6% year-on-year to €1.1 billion.

However, Vodafone Group CEO Vittorio Colao said the regulatory process for the Idea Cellular merger was going well and should be complete in the first half of 2018.

On 20 March 2017, Vodafone announced an agreement to combine its subsidiary, Vodafone India (excluding its 42% stake in Indus Towers), with Idea Cellular. The combined company will be jointly controlled by Vodafone and the Aditya Birla Group.

Service revenue declined 23.1% for Vodafone India as a result of intense price competition, Vodafone Group reported, which continued during Q3 as the Indian market leader increased the competitiveness of its tariffs despite price rises announced by the new entrant Reliance Jio.

This was exacerbated by a 29.2% decline in interconnection revenues following a MTR (mobile termination rates) cut on 1 October. Excluding the impact of regulation, service revenue declined by 14.2%. On a sequential basis, local currency service revenues excluding regulation declined 1.5% quarter-on-quarter.

“While the competitive and regulatory environment in India remains intense, we continue to make good progress in securing the required approvals for the merger with Idea Cellular,” said Colao, “and we have taken steps to strengthen the combined company’s financial position.”

Published in Telecom Operators

Vodafone Germany to invest €2 billion in fixed infrastructure

Written on Tuesday, 19 September 2017 08:30

Vodafone Germany said it plans to invest €2 billion in its fixed infrastructure as it moves to deliver gigabit fiber broadband to 13.7 million customers. The company said it aims to finish the investment by 2021 and will focus on three segments in cooperation with partner companies in Germany.

The network expansion and upgrade plays into Vodafone Germany’s aim to become a “leading converged communications operator” in the country. The operator said its enterprise-focused unit will bring fiber connectivity to 100,000 companies across 2,000 business parks at a cost of around €1.4 billion to €1.6 billion.

Vodafone Germany’s consumer operation, it said, will fork out €200 million to €400 million to expand its fiber network to reach 1 million homes in rural areas. The overall scheme will include €200 million invested into upgrading existing cable infrastructure to deliver gigabit speeds to Vodafone Germany’s cable base of 12.6 million.

Vodafone Germany CEO Hannes Ametsrejter said he was “excited to announce this transformation investment plan for Germany, which will bring gigabit broadband services to millions of consumers and business.”

Ametsrejter added, “The project is consistent with our strategic goal to become a leading converged communications operator in Germany, enabled by a best-in-class gigabit network infrastructure.”

The company’s fixed unit contributed 40 percent of service revenue in Germany in the opening quarter of its financial year, contributing €1 billion in quarterly earnings, according to Vodafone’s Q1 fiscal financial statement covering the three months to end June.

The investment is Vodafone’s largest since its £19 billion ‘Project Spring’ investment, a two-year strategy to improve its mobile infrastructure. The operator’s presence in Germany’s broadband market grew when in 2013 it acquired the country’s largest cable operator Kabel Deutschland for €7.7 billion.

Published in Finance

Vodafone announced new global rules intended to prevent its advertising from appearing within outlets focused on creating and sharing hate speech and fake news. The new rules – which are now in effect – include Vodafone's definition of hate speech and fake news for the purposes of determining whether or not a particular outlet should carry Vodafone advertising. There is no change to Vodafone's policy on network access to the outlets in question.

Over the last decade, the rapid growth of digital advertising has provided major brands such as Vodafone with extensive opportunities to engage directly with consumers and businesses online. More recently, the advertising industry and digital advertising providers such as Google and Facebook have developed automated advertising technologies that use algorithms to deliver digital advertising to targeted demographic categories of internet user, serving ads dynamically within individual websites and social media channels as those users browse.

While automated advertising is a powerful tool – allowing advertisers to focus their investment on specific market segments across almost all digital properties – in a small minority of instances it can also lead to unintended and potentially harmful outcomes including advertising appearing next to offensive content. Additionally, automated advertising technologies can have the effect of generating revenue for outlets focused on hate speech and fake news.

Advertisers such as Vodafone therefore risk their brands being marketed within outlets that are fundamentally at odds with their values and beliefs as a company while inadvertently providing a source of funding for those outlets.

"Hate speech and fake news threaten to undermine the principles of respect and trust that bind communities together,” said Vodafone Group Chief Executive Vittorio Colao. “Vodafone has a strong commitment to diversity and inclusion; we also greatly value the integrity of the democratic processes and institutions that are often the targets of purveyors of fake news. We will not tolerate our brand being associated with this kind of abusive and damaging content."

Vodafone already has a number of rules designed to ensure transparency and integrity in the allocation of the Group's global advertising budget. For example, Vodafone's current policy expressly prohibits using commercial engagement with a media outlet as leverage to influence editorial opinion regarding Vodafone's products, services or corporate activities.

The new rules focused on hate speech and fake news outlets are implemented by means of a whitelist-based approach using content controls implemented by Vodafone’s global agency network (led by WPP), Google and Facebook.

Those controls ensure that Vodafone advertisements are only served within selected outlets identified as highly unlikely to be focused on harmful content. These measures will be reviewed regularly by Vodafone and its global agency network to ensure that the selection of outlets for whitelisting is appropriate and neither too broad nor too narrow.

Vodafone, third parties acting on its behalf and its advertising platform suppliers (including, but not limited to, Google and Facebook) must take all measures necessary to ensure that Vodafone advertising does not appear within hate speech and fake news outlets.

Vodafine defines these as outlets whose predominant purpose is the dissemination of content that is deliberately intended to degrade women or vulnerable minorities (“hate speech”); or presented as fact-based news (as opposed to satire or opinion) that has no credible primary source (or relies on fraudulent attribution to a primary source) with what a reasonable person would conclude is the deliberate intention to mislead (“fake news”).

Published in Telecom Operators

Vodafone and LG UPlus jointly announced a new Partner Market agreement for South Korea, the first strategic partnership by LG Uplus with a global telecommunications company since the company’s founding in 2010.

Under the new partnership, which commenced on 1 April 2017, Vodafone will draw on its global reach and experience to support the consumer and enterprise operations of LG Uplus.   Vodafone will share best practices with LG Uplus across all areas of their business, including network strategy and development, with LG Uplus benefiting from Vodafone’s knowledge and experience to help improve their customer base management capabilities.

Vodafone and LG Uplus will also cooperate to offer unified communications and enterprise services to multinational companies with a presence in South Korea and internationally.

Vodafone Partner Markets Chief Executive Diego Massidda commented, “Our new partnership will enable LG Uplus to benefit from Vodafone expertise and experience, in addition to access to our global enterprise products and services.  I am delighted that LG Uplus has joined our Partner Market network and I look forward to building on our relationship in the coming years.”

Youngsoo Kwon, Chief Executive for LG Uplus said: “Vodafone is one of the world’s leading telecommunications companies and close cooperation will enable us to streamline and improve our existing business performance and pioneer new areas.  Vodafone is the ideal partner to help our drive to become world-class.”

Published in Telecom Operators

Vodafone Group announced that its wholly-owned subsidiary, Vodafone International Holdings B.V. (“Vodafone”), has agreed to transfer part of its indirect shareholding in Safaricom Limited (“Safaricom”) to Vodacom Group Limited (“Vodacom”), its sub-Saharan African subsidiary. Based on the agreed terms of the transaction, Vodafone will be exchanging a 35% indirect interest in Safaricom for 226.8 million new ordinary Vodacom shares.  

The transaction, which has a value of €2,361 million based on Vodacom’s closing share price on Friday 12 May 2017, will increase Vodafone’s ownership in Vodacom from 65% to 70%. Vodafone will continue to hold a 5% indirect interest in Safaricom following the transfer, in addition to the indirect interest held through Vodacom.

As part of the transaction, Vodafone Group has given appropriate assurances to the Government of Kenya to ensure the ongoing success of the long standing partnership between Safaricom, the wider Vodafone Group and the Government of Kenya.

The transaction is expected to generate clear benefits for Safaricom, Vodacom and Vodafone Group: Vodafone Group streamlines and simplifies the management of its sub-Saharan African holdings; strengthens alignment and cooperation between Safaricom and Vodacom and provides greater scope to share talent and expertise across the region as well as internationally; and Vodacom gains exposure to the attractive Kenyan market and one of the most successful and innovative telecoms companies in Africa, further enhancing its investment case and strategic position.

Completion of the transaction is subject to a number of conditions, including approvals from Vodacom minority shareholders, approval from the Financial Surveillance Department of the South African Reserve Bank and confirmation from the Kenya Capital Markets Authority that the Transaction does not trigger an obligation for Vodacom to make a mandatory bid for Safaricom.

A committee of Vodacom’s independent non-executive directors has unanimously approved the transaction. Vodacom has appointed an independent expert, Deloitte & Touche to provide a fairness opinion on the proposed transaction which will be included in the circular to be distributed to Vodacom shareholders on or about 5 July 2017 with the general meeting to approve the re-organization expected to take place on or about 15 August 2017. The transaction is expected to close in the third quarter of the 2017 calendar year.

Published in Finance

Competition in India’s telco sector has intensified since Reliance Jio was launched into the market in September 2016, adding 52 million subscribers in its first three months of operation. A report by a UK newspaper indicated that Vodafone India and Idea Cellular were seeking a merging with Reliance Jio. But the story has been denied by sources in a report by the Hindustan Times.

The newspaper’s sources said India’s current spectrum holding limits and revenue market share caps both indicate that a merger is not likely. A source from Idea Cellular was also noted in the newspaper article as denying that the company was in talks with Reliance Jio.

Competition in India’s telco sector has grown fierce since Reliance Jio entered the scene after it took a large share of the market from its competitors. The new provider of telecom services offered a range of attractive free services to customers to reel them in, which then lead to Reliance Jio’s competitors – including Bharti Airtel, Vodafone and Idea Cellular – to reduce the price of their offerings to match.

Vodafone Group responded to the threat by investing in its India unit last year, which included a payment to reduce its debt and also increase its 4G spectrum holding at an October auction. The company announced in November that its revenues in India had increased in its fiscal H1 (which covers the period to end-March). Vodafone also confirmed its plans to proceed with an IPO of its Indian unit “as soon as market conditions allow.”

Published in Telecom Operators

Nokia won Vodafone Group's prestigious Responsible Supplier Award for 2015. Vodafone presented the award, which recognizes outstanding performance, to Nokia at the operator's annual Supplier Awards ceremony in Amsterdam.

Published in Telecom Vendors