VOD.L - Vodafone Group Plc

LSE - LSE Delayed Price. Currency in GBp
159.52
-0.88 (-0.55%)
At close: 4:35PM BST
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Previous Close160.40
Open160.40
Bid160.16 x 0
Ask160.20 x 0
Day's Range159.52 - 161.76
52 Week Range1.50 - 1,602.00
Volume125,871,859
Avg. Volume79,994,238
Market Cap42.701B
Beta (3Y Monthly)1.40
PE Ratio (TTM)N/A
EPS (TTM)-28.20
Earnings DateNov 12, 2019
Forward Dividend & Yield0.08 (5.01%)
Ex-Dividend Date2019-06-06
1y Target Est2.01
  • Eco-Friendly Phone Companies Brace for 5G’s Energy Bill
    Bloomberg

    Eco-Friendly Phone Companies Brace for 5G’s Energy Bill

    (Bloomberg) -- The next generation of telecommunications technology could be the key to ending years of stagnation in the industry. But it’s also set to create a difficult dilemma for European phone companies.Carriers shelled out $80 billion to power the world’s antennas last year, according to Nokia Oyj. The prospect of having to raise spending on electricity – energy demand could triple with the introduction of 5G equipment, according to industry body GSMA – won’t sit well with phone companies that are already struggling to pay their dividends. At the same time, firms such as BT Group Plc and Vodafone Group Plc have pledged to slash emissions, and that will require a rapid shift to renewable energy.Just as carriers are about to roll out vast quantities of power-hungry gear, they’re also promising to save the planet. And funds are tight. Accomplishing everything at the same time could be a tall order.“If they have set up ambitious targets for overall power consumption and CO2 emissions, those could potentially be in conflict when they start to roll out 5G,” said Jerker Berglund, industry consultant at JB Sustainable Approach AB. “Reducing total power consumption is going to be a challenge.”5G could unleash a 1,000-fold jump in data demand for connecting factories and cars and supercharging mobile devices, according to the GSMA. That’s an irresistible sales prospect for a telecom industry whose revenues have yet to recover from a slump that started in 2015.Next-generation antennas and masts can be 10 times more energy efficient than 4G’s. However, these power savings could get swamped by the surge in demand for new applications. 5G will link up billions of things that have never been connected before. To accommodate all these new connections, masts might have as many as 128 antennas, versus just four or eight on a typical 4G mast. Bouncing signals through cities may require thousands of transmitters and receivers to be bolted onto rooftops and street furniture. This looks like it will all require a lot more bandwidth, and a lot more power.What’s more, carriers can’t afford the cost of swapping out all their equipment at once, Berglund said. The rollout will have to happen gradually, so many masts will still carry less efficient 4G, 3G and 2G antennas alongside 5G ones. This situation could last for years – some 3G kit is still in place 18 years after that technology was introduced.This article is part of Covering Climate Now, a global collaboration of more than 250 news outlets to highlight the climate change story.Electricity already makes up about a third of carriers’ average operational costs, according to Nokia, and raising this will pressure balance sheets when the industry isn’t in a good place to cope. Vodafone has cut its dividend to conserve cash to pay for spectrum and capital investment. Bank of America Merrill Lynch analysts said Monday they expect BT to slash its dividend by as much as 40% to fund capital expenditure and price cuts.“As we consume more, power’s going up, and the industry is trying to bring that down as much as possible,” said Henry Calvert, head of future networks at the GSMA, the mobile industry trade body. “There’s a lot of activity in the industry about making the power we use more efficient.”But whatever fixes carriers make to lower energy bills – sharing networks, getting masts to autonomously power down at times of low data demand, introducing “beam-forming’’ so smart antennas can pinpoint devices instead of pumping out data indiscriminately – the surge in power usage creates a challenge for meeting emissions goals.Deutsche Telekom AG, for example, pledged a 90% reduction in carbon emissions between 2017 and 2030. In total, European carriers will have to reduce carbon dioxide emissions by 6 million metric tons within 11 years to achieve their carbon targets, BloombergNEF analyst Kyle Harrison said in a research note.One solution is for the telecom companies to shift their power supply to renewables, but this can’t be done at the flick of a switch. Clean-energy contracts are complicated and can take years to negotiate.Carriers will be under pressure to sign new ones quickly to cope with 5G’s power demands, Harrison said. They’ll be vulnerable to striking bad deals, and price fluctuations in energy markets can turn some arrangements that initially look good into losers in the longer term. “The switch to 5G is going to put more pressure on telecoms to purchase clean energy and reduce their emissions,” he said. “Many clean energy deals can result in losses for corporations. Telecoms will need to put extra consideration into this as their power demand goes up, especially if losses will impact their investments into 5G.”To contact the author of this story: Thomas Seal in London at tseal@bloomberg.netTo contact the editor responsible for this story: Jennifer Ryan at jryan13@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Reuters

    RPT-Telefonica plans to offer voluntary redundancy to up to 20% of Spain staff -source

    Telefonica plans to offer voluntary redundancy to up to a fifth of its workforce in Spain, a person with knowledge of the matter said on Monday, as the telecoms company struggles to boost earnings in its home market. Europe's third-biggest telecom company will make the offer to all employees over 53 years of age, who total just under 5,000 in a national workforce of 25,000, at a meeting with labour unions on Sept. 11, the person said. Large telecom firms across Europe have been struggling to post strong growth against fierce competition.

  • Australian watchdog hurt competition by barring Vodafone, TPG merger: telcos
    Reuters

    Australian watchdog hurt competition by barring Vodafone, TPG merger: telcos

    Australia's antitrust regulator has hurt competition by blocking a A$15 billion ($10 billion) merger between the nation's third- and fourth-largest telecoms providers, the companies said in court on Tuesday as their legal appeal got underway. The Australian Competition and Consumer Commission (ACCC) opposed in May a combination of TPG Telecom Ltd and the local joint venture of Britain's Vodafone Group PLC on the grounds it would eliminate a potential fourth mobile network competitor. A coming together of the companies would actually encourage competition but "the pro-competitive effects of this merger are imperiled by the ACCC's opposition to it", Vodafone lawyer Peter Brereton said.

  • Are Investors Undervaluing Vodafone Group Plc (LON:VOD) By 49%?
    Simply Wall St.

    Are Investors Undervaluing Vodafone Group Plc (LON:VOD) By 49%?

    Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Vodafone Group Plc...

  • Reuters

    UPDATE 1-Deutsche Telekom 5G network goes live in 5 German cities

    Deutsche Telekom said on Thursday its 5G mobile network had gone live in five German cities, timing the launch for maximum impact on the opening day of the IFA consumer electronics fair in Berlin. The German market leader paid 2.2 billion euros ($2.5 billion) for 5G spectrum at a recent auction and the regulator has just unlocked access to the 3.6 Gigahertz band that will power its initial 5G offering. Berlin, Munich, Cologne, Bonn and Darmstadt now offer local 5G services with bandwidth of up to 1 gigabit per second - fast enough to download a movie onto a smartphone in a few seconds.

  • Bloomberg

    Infobip Taps Ex-Banker as CFO as IPO, Stake Sale Plans Loom

    (Bloomberg) -- Infobip Ltd., a Croatian software supplier for companies including Uber Technologies Inc, has tapped a former investment banker as chief financial officer as it weighs an initial public offering.Mario Baburic is to take up the role that wasn’t covered at the company, effective immediately, according to a statement from the Croatian firm. Previously, Baburic headed corporate finance operations for UniCredit SpA’s Croatian unit until 2012 and then moved on to run global business development at Podravka, a Croatian food producer. He also founded Creative Fields Holding, a technology startup.Infobip is considering holding an IPO in New York, while also looking at other options to raise cash as it eyes expansion in the U.S., Chief Executive Officer Silvio Kutic said in August.The company provides corporations with technology to send notifications to customers through different channels, such as WhatsApp or text message. Among other things, the technology allows companies to mask contact details between employees and customers. Infobip clients include Vodafone Group Plc and Costco Wholesale Corp.To contact the reporter on this story: Rodrigo Orihuela in Madrid at rorihuela@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Vodafone UK appeals move to ease price caps on BT business lines
    Reuters

    Vodafone UK appeals move to ease price caps on BT business lines

    Vodafone UK is seeking to overturn a move by regulator Ofcom to relax restrictions on how much BT can charge for business fiber connections, saying it will result in higher bills for companies, universities and hospitals. Ofcom had already eased price regulation in central London in a review in 2016, saying BT did not have significant market power. It has now relaxed the restrictions in other cities where BT faces two or more rivals, such as Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester.

  • U.S. Firms Steer Clear of Europe's Big Mobile Tower Sell-Off
    Bloomberg

    U.S. Firms Steer Clear of Europe's Big Mobile Tower Sell-Off

    (Bloomberg) -- European phone companies are selling their mobile masts and growth-hungry U.S. tower companies have money to spend -- it looks like a marriage made in heaven.Instead, firms like American Tower Corp. and Crown Castle International Corp. are largely staying away, making it easier for Spain’s Cellnex Telecom SA and infrastructure funds managed by Macquarie Group Ltd., KKR & Co. and others to sweep up the region’s tower assets.Their hesitation is driven partly by price: the global hunt for yield has driven up the premium for these assets, which offer reliable, steady income streams. Independent tower companies also won’t pay top dollar unless they see a path to significant revenue growth -- and that’s where they have a problem with Europe.“The American tower companies say, ‘OK, Europe is fine at the right price, but prices are not where we need them to be, so we think the opportunities elsewhere are more attractive,”’ said Nick Del Deo, senior analyst at U.S. research firm MoffettNathanson.Tens of thousands of European masts are expected to see ownership changes in the next two years as companies such as Iliad SA, Vodafone Group Plc and Telecom Italia SpA bring in new investors to reduce debt and share the heavy cost of rolling out 5G technology.But only a quarter are likely to end up with independent operators, according to TowerXchange. Vodafone and CK Hutchison Holdings Ltd. are creating separate units for almost 90,000 towers and the consultancy expects them to maintain control over those businesses. That’s a turn-off for independent companies, which try to maximize revenue by leasing mast space to as many network operators as possible.Many European carriers want to keep some hold on their towers because they see mobile infrastructure as a strategic asset that can help them manage costs and perhaps gain a competitive edge. They’re also mindful of what happened in the U.S., where operators rushed to sell their towers more than a decade ago only to find themselves stuck with a big bill for leases and capacity rights.Vodafone Surges on Possible IPO, Stake Sale of Towers UnitVodafone and Telefonica Ink 5G Terms in Move to U.K. Tower SalesNiel Agrees to $3 Billion of Phone Tower Sales to CellnexCK Hutchison to Separate Out European Phone Towers BusinessSelling full ownership of towers to independent players can spur innovation and reduce expenses by encouraging carriers to share infrastructure, avoiding costly duplication. European carriers’ insistence on maintaining control means the continent’s progress in rolling out 5G will likely continue to be slower compared to the U.S., where towers are largely in independent hands.“There is a risk that the European carriers go too far the other way,” Del Deo said. “The captive tower model, if you look globally, has never proven to be that effective.”For now, American Tower is mostly relying on building towers in Africa, Latin America and India for its international growth.Crown Castle didn’t respond to a request for comment on its future European asset bidding plans. American Tower declined to comment. Its chief executive officer, James Taiclet, told analysts last month that recent large European tower sales didn’t meet its bar for growth prospects and asset costs.Here are some other reasons why U.S. tower firms aren’t piling into Europe:Redundancy: Europe has more cases of towers operated by rival carriers sitting in close proximity. An independent owner may want to remove one to cut costs, but the tower often comes with a ground lease that they must keep paying for years.Less Potential: Europe has lots of rooftop antenna sites, which can’t accommodate as many customers as can a ground-based tower. Many European portfolios include broadcast towers in rural areas that may not be as valuable as mobile towers.Radio Emission Rules: In some countries, rules on maximum electromagnetic radio emissions limit the number of antennas a tower firm can install at a single site.\--With assistance from Scott Moritz.To contact the reporter on this story: Thomas Pfeiffer in London at tpfeiffer3@bloomberg.netTo contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net, Jennifer Ryan, Anthony PalazzoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Reuters

    Britain to make Huawei decision on 5G by the autumn - digital minister

    Britain will make a decision on whether to allow China's Huawei equipment to be used in its 5G networks in the autumn, the digital minister Nicky Morgan said. "We've got to make sure that this is going to be a decision for the long term, making sure that we keep all our networks secure." (Reporting by Kate Holton.

  • Amazon’s Cloud-Computing Empire Faces Threat From Edge of the Network
    Bloomberg

    Amazon’s Cloud-Computing Empire Faces Threat From Edge of the Network

    (Bloomberg) -- Three companies — Amazon.com Inc., Microsoft Corp. and Alphabet Inc. — quietly dominate the world of cloud computing.With more more than 100 giant data centers worldwide, they rent out computing power to all manner of customers, making billions of dollars along the way. In fact, cloud computing has done more to fuel Amazon’s earnings in recent years than its e-commerce business.But there’s a threat looming on the horizon, quite literally at the edge of the network. With so many mobile devices and sensors now connected to the internet — and relying on artificial intelligence — more people and companies need their computing power close to them. For everything from fast analysis of road conditions to streaming holographic concerts, remote data centers are just too far away.That’s going to hand a huge opportunity to wireless carriers, which are building fast 5G networks to handle the task. And create a threat for the dominant cloud-computing players, according to telecom analyst Chetan Sharma. “Over time, cloud will be primarily used for storage and running longer computational models, while most of the processing of data and AI inference will take place at the edge,” said Sharma, who just wrote a report on the topic sponsored by software provider AlefEdge Inc. He pegs the size of this so-called edge-computing market at more than $4 trillion by 2030.Wireless carriers and the owners of cell towers have a big advantage in the edge-computing race: Not only do they control access to high-speed telecommunications networks, they have valuable real estate, such as tens of thousands of cell sites all over the country.Cloud computing isn’t going away by any means. But there’s more pressure on the industry’s Big Three to team up with wireless carriers, so they’re not left out of the burgeoning edge market.“The big players realize that at a minimum they need to partner up with operators to get access to their real-estate property,” Sharma said.Already, AT&T Inc. — the second-largest U.S. wireless carrier — has joined forces with Microsoft Corp. and IBM Corp., two cloud providers.“Our goal is that our partners are wildly successful,” said Sam George, a cloud executive at Microsoft. “If our partners are wildly successful, we’ll be wildly successful. There’s a lot of money to be made for partners.”Amazon and Google declined to comment on their plans.AT&T has hundreds of workers focused on edge computing, and it’s “a core part of our 5G strategy,” said Mo Katibeh, chief marketing officer of AT&T’s business division.“This is one that takes a village.”IBM, meanwhile, is also working with carrier Vodafone Group Plc in Europe.“The networks are essentially themselves becoming a cloud,” said Steve Canepa, IBM’s global managing director for the telecom industry. “The telcos today have a point of presence at the edge, and that becomes a great place to have an extension of the platform.”Cloud providers in China — such as Alibaba Group Holdings Ltd. and Tencent Holdings Ltd. — invested in carrier China Unicom two years ago. And more such investments and partnerships could be coming, Sharma said.For other tech companies, including chipmakers like Intel Corp., the hope is the shift leads to a bigger opportunity for everyone.“We see a rapid convergence between the cloud providers and connectivity providers,” said Caroline Chan, a general manager at Intel. “In our view, it’s a bigger pie.”Other telecom players are angling to team up with both carriers and cloud providers. Crown Castle International Corp., which owns fiber lines as well as more than 40,000 cell towers in the U.S., is in talks with the two camps, said Paul Reddick, a vice president at the company.Crown Castle also is an investor in startup Vapor IO, which is deploying edge computing this year in six metro areas, including Chicago.“I would say this is one that takes a village,” Reddick said.Other projects are already well underway. At CenturyLink Inc., about 100 facilities that used to store telecom equipment are now outfitted with servers. And it’s making them available to corporate customers in sectors like retail and industrial robotics.“We’ve already sold these facilities to a number of customers that need to get that compute closer to the network edge,” said Paul Savill, a senior vice president at CenturyLink. “We’ve seen enough activity in this space that we can confidently build out this infrastructure.”To contact the author of this story: Olga Kharif in Portland at okharif@bloomberg.netTo contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Facebook Finally Meets a Regulator With Bite
    Bloomberg

    Facebook Finally Meets a Regulator With Bite

    (Bloomberg Opinion) -- In France, they call it taking mustard after dinner. In Germany, they talk about a child having already fallen in the well. In England, they speak of closing the stable door after the horse has bolted.They all are good ways of describing how regulators have tended to deal with the world’s biggest tech firms. But when it comes to Facebook Inc.'s digital coin, Europe's antitrust watchdog seems to be intent on breaking with this previous inaction.Bloomberg News reported on Tuesday that the European Commission is scrutinizing the two-month-old Libra project and the group backing it amid concern the currency will be detrimental to competition. This is a good sign the regulator will do something about it.That’s welcome because antitrust authorities have, over the years, repeatedly failed to prevent the sort of practices which have cemented the dominance of Silicon Valley firms in their target markets. Regulators then struggle to rebalance the market after the fact.Some past decisions look misguided in hindsight. The most obvious are Google’s $3.2 billion acquisition of DoubleClick in 2008, which cemented the search giant’s control over digital ads, and Facebook’s purchases of Instagram and WhatsApp – deals that made it the preeminent social network.Facebook’s plan should give regulators plenty of reasons for concern. The organization administering the digital currency, the Libra Association, comprises 28 members so far, but the extent of Facebook’s leading role warrants closer examination.QuicktakeWhy Everybody (Almost) Hates Facebook’s Digital CoinThe motivation for many of the members seems at this stage to be a fear of missing out. After all, Facebook’s 2.4 billion monthly active users give it unparalleled scale. But that could also be construed as the Menlo Park, California-based firm abusing a dominant position: Members of the association might feel they can’t risk being left out, so have little choice but to take part.The group includes most of the world’s biggest payments companies: Mastercard Inc., Visa Inc., Paypal Holdings Inc., Stripe Inc. and Vodafone Group Plc, whose M-Pesa mobile money transfer service is dominant in parts of Africa.That means it could be seen as a horizontal agreement, according to Bloomberg Intelligence analyst Aitor Ortiz. Those kind of arrangements may be acceptable in certain cases if they benefit the end user, but are normally anti-competitive if they consolidate the influence of a discrete group at the expense of consumers or rivals.Facebook has said that it won’t push ahead with Libra until it has secured all the necessary regulatory approvals. The European Commission’s message seems to be: Don’t push your luck. If the group fails to pay heed, it risks fines and punishments further down the line. That will make it harder to sign up new partners who are unwilling to expose themselves to such regulatory hazards.One has to wonder whether the growing regulatory scrutiny the currency is attracting will make the project worth the effort for Facebook. For sure, the social networking giant needs to find a way to diversify its revenue away from advertising. But I’m unconvinced that Libra does that.If anything, it will become another pillar of the advertising business by supplying valuable data on purchasing intent: every time you make a purchase using Facebook’s digital wallet, you give the company a better understanding of what you’re buying and why.All this highlights the contradiction at the heart of Libra: if it is truly independent, what’s in it for Facebook? Regulators are right to press for an answer.To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Facebook, Ex-Vodafone CEO Find Common Ground in Meesho
    Market Realist

    Facebook, Ex-Vodafone CEO Find Common Ground in Meesho

    Facebook (FB) has joined with Naspers (NPSNY) and former Vodafone (VOD) CEO Arun Sarin to inject $125 million of fresh capital into Meesho.

  • Bloomberg

    Facebook, Sequoia Bet on Indian Startup in $125 Million Funding Round

    (Bloomberg) -- Facebook Inc. is participating in a $125 million fundraising for an Indian startup that is aiming to bring more commerce to social networks like, well, Facebook.Meesho, based in Bangalore, is what’s known in the tech industry as a social commerce startup, allowing people to build connections online and then sell through services such as Facebook and its WhatsApp and Instagram services. The funding round was led by South Africa’s Naspers Ltd. and also included Sequoia, Shunwei Capital, Venture Highway and Arun Sarin, the former chief executive officer of Vodafone Group Plc.Meesho is part of a crop of new e-commerce companies that are trying to take advantage of social connections to facilitate sales. The startup says that it has a network of more than 2 million “social sellers” in 700 towns across India, focusing on categories like apparel, wellness and electronics.“Our social sellers are small retailers, women, students and retired citizens, with 70% being homemakers who have found financial freedom and a business identity without having to step outside their homes,” said Vidit Aatrey, Meesho co-Founder and CEO.India has become an increasingly competitive market for e-commerce, the last unclaimed major country after Amazon.com Inc. took hold of the U.S. and Alibaba Group Holding Ltd. won China. Amazon is spending billions to gain share in India, while Walmart Inc. paid $16 billion for control of local leader Flipkart Online Service Pvt.Naspers has a history of backing startups in China and India -- and reaping big profits. It invested in China’s gaming giant Tencent Holdings Ltd. and India’s Flipkart, before the Walmart purchase. It led a $1 billion funding round in the Bangalore-based online food company Swiggy in December.Naspers shares have risen 23% this year, valuing the company at about $98 billion.\--With assistance from Loni Prinsloo.To contact the reporter on this story: Saritha Rai in Bangalore at srai33@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Power-Hungry Phone Companies Dial Into Surging Green Bond Market
    Bloomberg

    Power-Hungry Phone Companies Dial Into Surging Green Bond Market

    (Bloomberg) -- Phone carriers are huge energy users, and need to cut emissions. They also face massive bills to build out the next generation of wireless networks. Green bonds promise to help them with both.A steady flow of issuance could be building: Orange SA and BT Group Plc are poised to follow Telefonica SA and Verizon Communications Inc. in selling securities designed to fund environmentally friendly projects. The industry has already completed at least $3 billion of sales since January, its first steps into a sustainable debt market that Bloomberg New Energy Finance estimates could exceed $370 billion this year.The proceeds can help telecom companies replace power-hungry copper wires with fiber-optic cables, or build the 5G networks that promise to make cities, homes and factories more efficient. There’s plenty of investor appetite for this new take on sustainable investing, but there’s a catch: any hint that a bond doesn’t genuinely help the planet can cause some buyers to flee.“Telecoms have to invest a lot. In the long run, having green bonds in place is going to be very important,’’ said Juuso Rantala, who holds Telefonica’s green bond in the 400 million-euro ($449 million) fund he manages at Aktia Asset Management Ltd. in Finland. “If I find out that I cannot trust the company in the case of green bonds, I cannot trust them in many other ways too. If I cannot trust them, I don’t invest.’’The securities show how green debt is expanding beyond its original universe of the clean energy industry. Beef supplier Marfrig Global Foods SA and Australian retailer Woolworths Group Ltd. have tapped this market to help their operations become more environmentally friendly.For carriers, the task is urgent. The communications industry accounts for about 10% of global electricity demand, and that could exceed 20% by 2030 as demand for data balloons, according to Huawei Technologies Co.Telecom companies have ways to clean up their act. For example, replacing copper with glass wires would use 85% less energy, according to Telefonica. And 5G can enable a range of environmental benefits by allowing smart buildings to monitor heating, connected warehouses to optimize their logistics and power grids to better allocate electricity.But these companies are already staggering under a mountain of debt from, among other things, buying 5G licenses. They’ll need to make sure they can keep their borrowing costs low and tap investors when needed.That’s where green bonds can help: the interest costs are about the same as on these companies’ conventional securities, but they offer the opportunity to access a wider pool of investors.The share of funds focused on socially responsible investing, which includes environmental projects, has risen 34% over the last two years, and now accounts for $30.7 trillion of assets globally, according to the investor group Global Sustainable Investment Alliance.“Many more green telco bonds are likely,” Morgan Stanley analysts led by Emmet Kelly wrote in June. “Demand from funds that have incorporated sustainability into their investment framework has been key.’’Telefonica, based in Madrid, is a good example. Demand for the issue, which priced in January, was significant: the company received five times the orders than what was available for sale, and obtained a spread more than the mid-swap rate that was about 25 basis points lower than initial indications.The yield on the 1 billion-euro 5-year security is in line with the rest of its curve, Bloomberg data show, indicating it didn’t have to pay a premium to tap demand for sustainable credit. It’s a similar story for Verizon and Vodafone Group Plc.Orange and BT Group are paying attention -- they have inserted clauses into their Eurobond prospectuses which would let them issue green bonds in the near future. And Deutsche Telekom AG is monitoring the surging market closely, said a spokesman.For investors, the risks go beyond what’s expected for any fixed-income asset. Buyers also have consider just how green these bonds are.“The question is whether or not a bond offers a real energy efficiency gain or overall gain for the environment,’’ said Arnaud-Guilhem Lamy, who holds telecom securities in his 340 million-euro ($381 million) green bond fund at BNP Paribas Asset Management in Paris. “If we think it’s insufficient, we would sell.’’For a start, there’s always the possibility that this new breed of green-bond borrowers divert proceeds to inappropriate purposes, including pooling them into general funds. Though monitoring groups such as credit rating firms can discourage such behavior, it’s something investors need to watch.But 5G presents a particular environmental paradox.Internet-of-things technologies will connect billions more devices and require many more antennas, so 5G will initially use more power than 4G, according to Sustainalytics, an independent corporate sustainability research firm. This complicates the idea that 5G can be a green investment.However, Sustainalytics estimates the energy savings from 5G outweigh the extra emissions to deploy the new tech by a ratio of 5 to 1. The firm’s analysis of the Verizon bond issue, which included 5G deployment among the potential use of proceeds, found that it was a credible candidate for green financing.It’s a good thing, because Verizon plans on returning to this corner of the bond market. It looks like it will be welcome, too – its $1 billion issue of 10-year green debt was eight times oversubscribed within six hours of being offered for sale, said Jim Gowen, head of supply chain and sustainability for the U.S. carrier.“It was far beyond our wildest expectations,” Gowen said. “We are very interested in doing another one.’’\--With assistance from Paul Cohen and Lyubov Pronina.To contact the reporter on this story: Thomas Seal in London at tseal@bloomberg.netTo contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, Jennifer RyanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Why Vodafone Shares Rose 11% in July
    Motley Fool

    Why Vodafone Shares Rose 11% in July

    The company announced passable first-quarter results and an interesting reorganization.

  • Britain, Show Us Growth, Not Cash
    Bloomberg

    Britain, Show Us Growth, Not Cash

    (Bloomberg Opinion) -- Reality is beginning to bite in the FTSE 100 as some high-yielding stocks give up on generous dividends. But many British companies are still continuing to offer jaw-dropping payouts when what investors really crave is growth.The dividend culture of the FTSE 100 has long been an oddity. Its investors have received a far higher proportion of their total returns from income over the last two decades than if they had invested in, say, the S&P 500 over the same period.With dividends a very British symbol of corporate confidence, boards are reluctant to cut them even when it might be wise to do so. So the FTSE 100 culture has been self-reinforcing.This year has brought some signs of change. Centrica Plc slashed its payout last week. Analysts had expected the utility to announce a deep cut, but not by nearly 60%. Vodafone Group Plc snipped its dividend in May. And last month, tobacco giant Imperial Brands Plc dropped a commitment to grow its payout 10% annually.Yet even now, these companies’ share prices look superficially cheap on a dividend basis, with yields (the dividend divided by the share price) of between 6% and 10%.Indeed, such ratios are nowadays pretty common in the U.K. The average dividend for the top 15 highest-yielding stocks is worth 9% of the share price. The standard explanation – that this signals dividend cuts in the coming years – doesn’t fit very well. Take analysts’ predictions for dividends in three years; even with some cuts forecast, the average yield for this group is still 9%.This is especially odd in a low-rate environment. Yields on some government bonds and high-rated corporate debt are negative or zero. Surely income investors would buy these dividend stocks if the return provided by their annual cash payouts was only 5% rather than double that level? Wouldn’t that provide sufficient compensation for the added risk?One explanation is simply that international investors just don’t care for yield anymore. Domestic U.K. income funds probably would be willing to pay more for these stocks and bid down their yields. But this group isn’t driving the market. Global investors are. They covet growth and don’t want exposure to the U.K. until there’s clarity about Brexit. The average expected increase in sales over the next two years for the top-15 yielding U.K. blue-chip stocks is under two percent. Of course, if the companies aren’t growing, it’s likely because of past under-investment caused by overly-generous dividends. But cutting dividends now to invest in growth won’t pay off for some time and would only infuriate the small pool of domestic investors who actually like the income. Meanwhile, global investors sit on the sidelines and company managers stand frozen like a deer in the headlights.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: Stephanie Baker at stebaker@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

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    (Bloomberg) -- Infobip, a Croatian technology company that counts Uber Technologies Inc. and Burger King among its clients, is weighing an initial public offering in New York as it makes plans to expand in the U.S.A public listing “is something that we are discussing at the moment," Silvio Kutic, co-founder and chief executive officer of Infobip, said in a phone interview. “We are constantly thinking, checking, when to go in this direction and maybe in the next few months, half a year, a year, there shall be a decision."The company provides corporations with technology to send notifications to customers through different channels, such as WhatsApp or text message. In March, the company said Uber is using its technology to mask contact details when drivers and riders communicate. The company’s customers also include Vodafone Group Plc, Costco Wholesale Corp. and Zendesk Inc.Founded in 2006, Infobip has some 1,750 employees who helped generated about 435 million euros ($485 million) in revenue in 2018, according to Kutic. Employees own 10% of the shares, with the rest shared among the company’s three founders.“We had about 30% annual revenue growth in the last two years and this year we are even accelerating," Kutic said. Demand for alerts from SMS phone messages are “still growing like crazy globally."The sector is highly fragmented. Infobip has strong domestic rivals in countries such as China and Brazil, but the largest is U.S.-focused Twilio Inc.Infobip is planning to take on San Francisco-based Twilio in its home market, where it sees most scope for growth. The company bolstered its presence in recent months in the U.S. by opening an office in New York, it’s second in the country, and after acquiring assets from Ericsson AB.“We are now preparing for our big push,” Kutic said. "Today, about 35% of our revenue comes from U.S.-based customers, but these are the digital native companies from Silicon Valley, who operate with us internationally."The U.S. is also where Kutic, who owns the majority of the shares together with two other partners, would someday like to see his company trading."For IT companies, there is much more liquidity and better exposure" on U.S. exchanges, he said. "It would be the crown on our works."To contact the reporter on this story: Rodrigo Orihuela in Madrid at rorihuela@bloomberg.netTo contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Amy ThomsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

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