From a fundamental viewpoint, this operation was excellent for Vodafone. Vodafone acquired Liberty Global's operations in Germany, the Czech Republic, Hungary, and Romania for €18.4bn back in -18. The Kabel-Deutschland bid in 2013 allowed Vodafone to enter the German quad-play communications market, while the strategic M&A of Ono allowed it to strengthen its position in Spain. What I am speaking about is the company's Post-VZ cash-long state, where Vodafone took advantage of telco Europe to buy several EU cable operators. ![]() Management made extremely smart plays that have been overlooked by the broader market. You may get the picture that Vodafone is not an especially well-managed company, but this is not entirely true. Thankfully, VOD is a primarily European player, despite its hundreds of millions of Indian customers. Vodafone's degree of loss and issues here is hard to overstate, given that Vodafone chose to give out a 35.8% stake in its company to the government of India rather than paying out the interest owed to the government. The winner of the ruling is Jio, which not only owes very little money but already is an Indian market leader. In summer 2020, the Supreme Court ruled that Indian operators definitely have to pay the untold (zillions, not yet estimated) amount of rupees of the historical spectrum and license fees to the government that this same Court had decided to impose in the previous autumn. ![]() It's also fair at this point to say that the promised windfall and "growth" story has turned into a ball-and-chain around Vodafone's corporate ankle. Tough competition, which has heated up even more insistently since the launch of Jio back in -16. However, all is, of course, not well in the Indian market. This is much alike the plans of AT&T ( T) and other global/American telecommunications giants, which are all currently facing the CapEx-intensive prospects of expanding already existing 4G networks into 5G. Vodafone also manages several 5G initiatives across Europe, among other things, in the complete company rollout of the new communication standards across the continent. Vodafone's historical and current stance on India as a market is that it represents an important driver for future growth (hence the fight for almost a billion customers), and they continue to plan to grow in the country. The acquisition of Liberty Global is the latest feather in the company's now-extensive cap of transactions. Vodafone's strategy over the past few years has included the M&A of smaller wireless and telecommunications companies and the development of its services into a full-range suite of communication plans for customers worldwide (with a core focus on Europe). The stake was sold for $130B, and the asset sale that Vodafone has undergone as part of its plans to "cut the cord" in pay-TV and similar ventures is part of what's depreciated the stock's nominal value over the past few years. This was sold as a part of the company's restructuring plan. These subscribers will double as a result of Vodafone's merger with Idea Cellular, which was closed in mid-2018.īefore 2014, Vodafone owned a large (45%) stake in the US telecommunications giant Verizon ( VZ). Vodafone as an entrant into the Indian market has seen some success, and they currently have over 375 million subscribers in India alone. The company's plans for this exposure are quite clear - they aim to diversify into further markets in India, Africa, and other nations/continents in order to decrease their dependency on Europe as a market, which is now in the middle of its execution. Some of Vodafone's main markets include Germany, Italy, and the UK, which together account for roughly 50% of its group revenue. The company, along with its joint ventures, offers telephone, mobile, and broadband services to over 550 million customers worldwide. When looking at Vodafone, we want to begin by understanding the company's history - because it's a relevant one. Also, and most importantly, we're going to see what we can make by investing in the company at this valuation - or at what valuation we should be starting to invest in Vodafone. We're going to talk about the history and foundations of the company and look at where the company is going. The company is a world-leading telco operator with one of the largest bases of customers on earth (close to 600 million combined in Europe, the Middle East, Africa, and Asia, with around 375 million in India). ![]() In this piece, we're going to take a look at European telco giant Vodafone ( NASDAQ: VOD ). Author's Note: This is the free version of a premium article posted on iREIT on Alpha in June of 2022.
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