VOD - Vodafone Group Plc

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
20.33
+0.26 (+1.30%)
At close: 4:00PM EST
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Previous Close20.07
Open20.19
Bid20.30 x 4000
Ask20.32 x 2900
Day's Range20.18 - 20.37
52 Week Range15.53 - 21.72
Volume2,004,508
Avg. Volume2,934,119
Market Cap54.646B
Beta (5Y Monthly)0.54
PE Ratio (TTM)N/A
EPS (TTM)-2.82
Earnings DateN/A
Forward Dividend & Yield0.99 (4.87%)
Ex-Dividend DateNov 26, 2019
1y Target Est27.63
  • Saudi Telecom to Buy Vodafone Egypt Stake for $2.39 Billion
    Bloomberg

    Saudi Telecom to Buy Vodafone Egypt Stake for $2.39 Billion

    (Bloomberg) -- Saudi Telecom Co. agreed to pay $2.39 billion for Vodafone Group Plc’s Egyptian business as part of an expansion outside its home market.The cash offer is for Vodafone’s 55% stake in Vodafone Egypt, the country’s largest mobile operator, and gives the North African firm an enterprise value of $4.35 billion, according to a statement from Saudi Telecom. Bloomberg reported on Tuesday that the companies were in talks.The deal gives STC, as the Riyadh-based firm is known, access to a country of some 100 million people where Vodafone Egypt has a market share of about 44%. STC still gets more than 90% of revenue from its domestic market. It helps Vodafone further streamline its focus on Europe and sub-Saharan Africa, and cut debt.Vodafone Egypt shares fell 0.8% at 11:35 in Riyadh, and London-based Vodafone Group dropped 0.2%. State-run Telecom Egypt, which has a 45% stake in Vodafone Egypt, rose 6.2%. STC dropped 0.2%.“The potential acquisition of Vodafone Egypt is in line with our expansion strategy in the MENA region,” Chief Executive Officer Nasser Sulaiman Al Nasser said in the statement. “Vodafone Egypt is the leading player in the Egyptian mobile market and we look forward to contributing further to its continuing success.”More than six years ago, STC had tried to acquire Telecom Egypt’s holding in the business. Vodafone Group had also expressed interest in buying the stake it didn’t own. Telecom Egypt said in a statement Wednesday that it was considering “all the possible ways it may deal with its investment.”Debt ReductionVodafone said it will use proceeds from the deal to reduce debt. The potential sale is also “consistent with our efforts to simplify the group to two differentiated, scaled geographic regions -- Europe and sub-Saharan Africa,” Vodafone CEO Nick Read said in a statement.Vodafone has been retrenching outside Europe and sub-Saharan Africa over the past decade, to raise cash amid leverage concerns and build scale in core markets such as Germany. Vodafone sold its New Zealand business last year, after offloading stakes in U.S. carrier Verizon Communications Inc. in 2013 and Asian operators Softbank Corp. and China Mobile Ltd. in 2010.Despite these and other moves, including a cut in the dividend and a plan to monetize its tower assets, S&P Global Ratings lowered the company’s credit rating one level to BBB in August, citing concerns about its debt.What Bloomberg Intelligence Says:“Vodafone’s likely sale to Saudi Arabia Telecom of its 55% stake at Vodafone Egypt at a multiple of 7x Ebitda heralds further portfolio reviews, we believe, given the U.K. company’s focus on core sub-Saharan African and Europe. A possible sale of its Turkish unit at a similar multiple could fetch 2.4 billion euros, assuming 3x leverage. Peers’ multiples, averaging 4x, nevertheless suggest much lower proceeds.”\--Erhan Gurses, telecom analystClick here for the researchSTC has bought stakes in telecom companies operating in Turkey, Indonesia, Bahrain, Kuwait and Malaysia over the past decade. If a transaction is finalized the companies expect to keep the Vodafone brand.(Adds background on Vodafone in ninth paragraph, updates shares)\--With assistance from Tarek El-Tablawy.To contact the reporters on this story: Abdel Latif Wahba in Cairo at alatifwahba@bloomberg.net;Matthew Martin in Dubai at mmartin128@bloomberg.netTo contact the editors responsible for this story: Shaji Mathew at shajimathew@bloomberg.net, ;Rebecca Penty at rpenty@bloomberg.net, Jennifer Ryan, Stefania BianchiFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Vodafone to sell stake in Egyptian unit to Saudi Telecom for $2.4 billion
    Reuters

    Vodafone to sell stake in Egyptian unit to Saudi Telecom for $2.4 billion

    DUBAI/CAIRO (Reuters) - Vodafone Group has struck a preliminary deal to sell its 55% stake in its Egyptian unit to Saudi Arabia's largest telecoms operator STC for $2.4 billion, the companies said on Wednesday. The non-binding deal values Vodafone Egypt at $4.4 billion and the two companies have agreed a arrangement over the long-term use of the Vodafone brand and other services in Egypt. Selling the stake is in line with Vodafone's efforts to streamline its operations to focus on Europe and sub-Saharan Africa, Vodafone Chief Executive Nick Read said.

  • Vodafone to sell stake in Egypt unit to Saudi Telecom for $2.39 billion
    MarketWatch

    Vodafone to sell stake in Egypt unit to Saudi Telecom for $2.39 billion

    Vodafone Group PLC said Wednesday that it has agreed to sell its 55% stake in its Egypt unit to Saudi Telecom Co. for $2.39 billion.

  • U.S. Disappointed as Johnson Gives Huawei Partial 5G Role
    Bloomberg

    U.S. Disappointed as Johnson Gives Huawei Partial 5G Role

    (Bloomberg) -- U.K. Prime Minister Boris Johnson risked a rift with President Donald Trump as he gave Huawei Technologies Co. the green light to help develop Britain’s next-generation broadband networks.While the U.K. government announced it will keep what it calls high-risk vendors such as Huawei out of the most sensitive core parts of its 5G mobile networks, the company will be able to supply other equipment that is critical to the roll-out of broadband such as antennas and base stations.That is a blow to the Trump administration, which wanted Johnson to impose an outright ban on the Shenzhen-based tech giant, citing concerns that its gear could be vulnerable to infiltration by Chinese spies. The two men spoke about the U.K. decision on Tuesday, according to Johnson’s office. American officials had warned the U.S. may be forced to hold back secret intelligence from the U.K. in future, if Johnson pressed ahead with giving Huawei a role. The company has always denied it poses any security risk.A key pillar of Johnson’s vision for a future outside the world’s richest single market is a trade deal with the U.S. and the Huawei license risks setting up a clash with Trump. On their call on Tuesday, Johnson “underlined the importance of like-minded countries working together to diversify the market and break the dominance of a small number of companies,” his office said.The initial reaction from Washington was muted.A senior U.S. administration official expressed disappointment at Johnson’s decision, but also hope that the U.S. and the U.K. could still find some way to exclude components from untrusted vendors in 5G systems in future. Trump himself has yet to comment, and is preparing to announce his Middle East peace plan later Tuesday.Read More: U.K. Still Wary of China Hacking Threat After Limiting HuaweiReactions from Congress were more critical. “Here’s the sad truth: our special relationship is less special now that the U.K. has embraced the surveillance state commies at Huawei,” said Republican Senator Ben Sasse of Nebraska.Republican Senator Marsha Blackburn of Tennessee suggested curtailing intelligence-sharing with any allies whose networks run on the equipment of “untrusted” vendors. “If we have exhausted our carrots with the Brits, it may be time to use a stick,” Blackburn said in a statement. Republican Senator Tom Cotton of Arkansas, in a reference to Brexit, said: “I fear London has freed itself from Brussels only to cede sovereignty to Beijing. Allowing Huawei to build the U.K.’s 5G networks today is like allowing the KGB to build its telephone network during the Cold War.”In London, too, senior members of Johnson’s ruling Conservative Party expressed dismay at his decision. Former party leader Iain Duncan Smith, and ex-cabinet minister David Davis warned of the security risks the Chinese company posed. “The size and complexity, the problem we are trying to protect against, is enormous,” Davis told the House of Commons. “Huawei should be banned from our networks.”The widely-expected announcement by Johnson’s government is a compromise between the outright ban on Huawei sought by the U.S. and the access sought by telecommunication companies. While it ends months of political wrangling in the U.K., the process remains fraught with peril for Johnson as he prepares to end Britain’s 47 years of European Union membership and plans to negotiate a new trade deal with the U.S.Market ShareUnder the U.K.’s policy, a cap of up to 35% will be imposed on Huawei’s share of the non-sensitive parts of the next-generation networks, such as antennas, masts and even fixed-line fiber-to-the-home components.High risk vendors, a category which would also include China’s ZTE, which is already banned from the U.K., are also to be “excluded from sensitive geographic locations, such as nuclear sites and military bases.”The 35% cap will be kept under review and could reduce over time, the government said. The cap is roughly in line with Huawei’s current overall market share in 4G, and Huawei said it was expected and reasonable. U.K. officials said the cap could be reduced over time, and the aim is to work with allies to help develop alternatives and get to a stage where the country doesn’t need to rely on high-risk vendors at all.However, the cap may mean that phone carriers like BT Group Plc’s EE, Vodafone Group Plc and Three have to rejig their 5G plans to comply. Three, a unit of Hong Kong-based CK Hutchison Holdings Ltd., had been depending on Huawei to deliver the entirety of its 5G radio-access network, with Nokia chosen to provide the core.Dave Dyson, chief executive officer of Three U.K., said in a statement: “We note the government’s announcement and are reviewing the detail.”Ericsson AB and Nokia Oyj are the primary Huawei rivals in networking equipment now, but the U.K. decision may help create more options for certain segments of wireless networks. Cisco Systems Inc., Juniper Networks Inc., Ciena Corp. and Infinera Corp. may benefit as wireless operators look for alternative suppliers, said Woo Jin Ho, a Bloomberg Intelligence analyst.Huawei ReassuredIn a statement, Huawei Vice-President Victor Zhang said it was “reassured” that the U.K. will let the company keep working with carriers on 5G.“This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future,” he said, committing to build on Huawei’s more than 15 years supplying U.K. telecom operators.The Confederation of British Industry, the leading business lobby in the country, said “this solution appears a sensible compromise that gives the U.K. access to cutting-edge technology, whilst building in appropriate checks and balances around security.” Vodafone, which uses Huawei in its U.K. radio network, said “we aim to keep any potential disruption to customers to a minimum.”By curbing Huawei’s access but still allowing the supplier to play a role in 5G, British officials are betting they can manage any security risks at home and still maintain intelligence-sharing ties with the U.S. and other allies.Johnson discussed Huawei in a phone call with Trump on Friday, and clearly wasn’t swayed by the push for a total ban. The prime minister said the U.K. could have the best of both worlds: retaining access to the best technology while protecting the data of consumers. British security services deem the risks manageable.For the U.K. timing of its announcement is particularly sensitive. U.S. Secretary of State Michael Pompeo, who had warned Johnson’s predecessor not to “wobble” on the issue, is due to visit on Wednesday.Huawei has been a key supplier to the U.K. and many other European phone networks for over a decade so this decision will be closely watched by others. In fact, many European nations are leaning in the same direction as the U.K.QuickTake: Can a 70-Year-Old Spy Alliance Endure in Era of 5G?The EU will publish its own guidelines on Wednesday which give leeway to member states to restrict or ban Huawei without forcing them to do so. According to a draft of the document seen by Bloomberg, countries should consider banning suppliers based in countries with insufficient “democratic checks and balances” from core 5G components.Canada has also indicated interest in a similarly split decision -- allowing Huawei while also pledging to contain any security risk.A key concern of the U.S. is that other countries will copy-and-paste the U.K.’s solution, relying on its regulatory system and high level of access to Huawei technology.“The U.K. model isn’t easily replicated,” warned Ian Levy, technical director of the National Cyber Security Centre, in a blog published alongside the decision. “The approach we’ve come up with for the U.K. is specific to the U.K. context. Others shouldn’t assume they’re getting the same level of protection for modern networks if they do similar things without performing their own analysis.”The market is broken, he added, because it’s not commercially attractive to build good security into networks.(Updates with Huawei alternatives in 16th paragraph)\--With assistance from Olivia Konotey-Ahulu, Josh Wingrove and Kevin Cirilli.To contact the reporters on this story: Thomas Seal in London at tseal@bloomberg.net;Alex Morales in London at amorales2@bloomberg.netTo contact the editors responsible for this story: Flavia Krause-Jackson at fjackson@bloomberg.net, Tim Ross, Rebecca PentyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Vodafone to sign MOU with Saudi Telecom for Egypt unit stake sale - Egyptian government
    Reuters

    Vodafone to sign MOU with Saudi Telecom for Egypt unit stake sale - Egyptian government

    Vodafone Group is to sign a memorandum of understanding with Saudi Telecom for the possible sale of a stake in Vodafone Egypt , the Egyptian cabinet said in a statement on Tuesday. The announcement came after a visit to Egypt by Vodafone CEO Nick Read. Vodafone Group holds a 55% stake in Vodafone Egypt, with the remaining 45% held by Telecom Egypt.

  • America Movil Unit Faces Fine for Network Discrepancy Case
    Zacks

    America Movil Unit Faces Fine for Network Discrepancy Case

    In order to promote healthy competition in the telco market, the Mexican telecom regulator penalizes America Movil (AMX) for anti-competitive practices.

  • Bloomberg

    U.K. Still Wary of China Hacking Threat After Limiting Huawei Access

    (Bloomberg) -- The U.K.’s cyber security watchdog has made clear the threat of being hacked by China remains, but probably not via Huawei Technologies Co.The Chinese telecom company is set to play a limited role in building the U.K.’s next-generation wireless broadband networks, in part due to a lack of alternative suppliers, but also the belief from the National Cyber Security Centre that it could manage any risks posed by Huawei.The key fear over embedding Huawei into telecom networks has been well flagged by the U.S., which has warned allies that the Chinese government could gain a back door to communications networks. Vodafone Group Plc is said to have found and fixed vulnerabilities in Huawei equipment used in the carrier’s Italian business in 2011 and 2012.There are several of reasons to hack a telecom network, including disrupting national operations, and obtaining call records, personal information or even physical movement records of individuals.But while the NCSC believes Huawei remains a high-risk supplier, it made clear there are more likely ways of getting hacked.“Placing ‘back doors’ in any Huawei equipment supplied into the U.K. is not the lowest risk, easiest to perform or most effective means for the Chinese state to perform a major cyber attack on U.K. telecoms networks today,” the NCSC said in a report published Tuesday.The agency didn’t spell out exactly what the alternative ways of breaking in might be, but the recent alleged hack of Amazon.com Inc. founder Jeff Bezos highlighted that there my be easier ways to access someone’s phone. Sometimes a casual WhatsApp message works just as well as large-scale state-sponsored hacking.Read more: U.S. Disappointed as Boris Johnson Gives Huawei Partial 5G RoleThe U.S. has repeatedly argued that the Chinese government could use Huawei to spy on the West. U.S. Secretary of State Michael Pompeo, who had warned U.K. Prime Minister Boris Johnson’s predecessor not to “wobble” on the issue, is due to visit on Wednesday.The concern is not entirely unfounded. In late 2018, the U.K. attributed a massive cyber attack on managed service providers, which look after information technology for businesses including telecom companies, to the China-linked group APT10, which had been siphoning off data undetected since 2016.But while it’s helped craft a role for Huawei in the U.K, the NCSC has not wobbled on whether China remains a threat to national security.“We assess that the Chinese State (and associated actors) have carried out and will continue to carry out cyber attacks against the U.K. and our interests,” it said in its report.To contact the reporter on this story: Giles Turner in London at gturner35@bloomberg.netTo contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net, Nate Lanxon, Rebecca PentyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Boris Johnson Chooses Huawei Expediency

    (Bloomberg Opinion) -- There’s a fine line between a fudge and a workable compromise. In Britain’s handling of Huawei Technologies Co., Prime Minister Boris Johnson has just about managed to secure the latter.The U.K. has brushed off the U.S.’s complaints and decided to allow its telecoms operators to install equipment made by “high-risk vendors” — read: Huawei — in their networks. But the government drew a line, excluding it outright from sensitive core parts of the network and capping its gear’s presence in the non-sensitive parts at 35% of the total.Outwardly, President Donald Trump won’t like the solution. But if the U.S.’s loudest protestations about security concerns were genuine, and not in fact an effort to stymie Chinese economic influence, then it should be able to stomach the compromise. American concern has focused on the risk of Huawei building backdoors into networks that can be readily exploited by Chinese state-sponsored actors. After all, China passed a law in 2017 obliging companies to assist the state with espionage efforts. And while no such backdoors have yet been found, that isn’t proof that they don’t exist.QuicktakeHow Huawei Landed at the Center of Global Tech TussleBut at the same time, a great deal of capital, both political and actual, has been invested in the promise of fifth-generation networks. Globally, revenue from the so-called Internet of Things will quadruple to $1.1 trillion by 2025, industry body the GSMA estimates. With about a third of the $50 billion global telecoms equipment market, Huawei has become the biggest player, with some of the best technology and lowest prices. Banning it would have ramifications for the pace of the 5G rollout.That is why the U.K. approach is a pragmatic one. It’s allowing Huawei products into the radio-access network — essentially the antenna and base stations — but keeping it out of the core: the server hubs that direct data around the network. Network security focuses on three pillars: confidentiality, integrity and availability. The first one focuses on ensuring that bad actors can’t see your data. The second is about making sure no-one is altering data during transmission. And the third is about guaranteeing network access when it’s needed.By those criteria, the U.K. decision seems to eliminate most, though not all, of the risk. If there are indeed backdoors into the parts of the network using Huawei gear, then they will likely only have access to data from that 35% of the network using it. It should still be possible to keep the equipment out of sensitive networks, such as those running the power grids and police communications. Indeed, France won’t let operators use Huawei antenna in Toulouse, for instance, where the airplane giant Airbus SA is based. BT Group Plc was already stripping Huawei gear out of its existing core networks. It likely would have been hard to secure lucrative government contracts without doing so.At any rate, telecommunications firms’ cybersecurity efforts will be on heightened alert where the slice of their operations that do still contain Huawei products is concerned. It might be easier to spot disturbing anomalies. If a base station is siphoning off gobs of data to somewhere in Asia, that will be more noteworthy than if it’s coming from the core network. As the distinction between core and edge networks blurs in the move toward full 5G, Huawei’s role must be managed even more carefully.Johnson had three sets of interests to navigate: the Americans threatened to cut off intelligence sharing with Britain in response; China’s ambassador warned a Huawei ban would have “substantial” repercussions for investment in the U.K.; and Britain’s own network operators — Vodafone Group Plc., BT, O2 (part of Spain’s Telefonica SA) and Three (owned by Hong Kong-based CK Hutchison Holdings Ltd.) — also had their say.The stakes are higher for these companies than for their U.S. peers, who are already prevented from using almost any Huawei products. That’s because they’re poorer. AT&T Inc. and Verizon Communications Inc. enjoy average revenue per customer of close to $50 a month. In the U.K., Vodafone gets just 14 pounds ($18.22), according to Bloomberg Intelligence.British carriers are therefore much more cost sensitive. Knocking Huawei out of the running in the radio-access network would have left a duopoly of Nokia Oyj and Ericsson AB, giving the suppliers a huge amount of pricing power. Samsung Electronics Co. is accelerating into the industry, but its gear is often even pricier. And U.S. suppliers such as Juniper Networks Inc. and Cisco Systems Inc. compete more effectively in the core network.The European Union looks set to issue guidelines that imitate the U.K. approach. The U.S. may not like it, but Johnson was never going to keep everyone happy.To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: Melissa Pozsgay at mpozsgay@bloomberg.netThis column does not necessarily reflect the opinion of 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/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Vodafone in Talks to Sell Egypt Unit to Saudi Telecom

    (Bloomberg) -- Sign up to our Next Africa newsletter and follow Bloomberg Africa on TwitterVodafone Group Plc is in talks to sell its majority stake in its Egyptian unit to Saudi Telecom Co., a senior government official said, in a deal that could see the Saudi firm claiming a prize it had eyed years ago.STC officials in Saudi Arabia and spokespeople for Vodafone Group didn’t respond to requests for comment, while Vodafone Egypt declined to comment. Egypt’s cabinet, though, said in a text message that the Egyptian unit’s chief executive officer was due to meet the prime minister on Tuesday.The Egyptian official asked not to be identified because the government had yet to become officially involved in the process.The possible deal comes more than six years after STC had considered bid for a minority 45% stake in Vodafone Egypt held by state-run Telecom Egypt. Vodafone Group had also expressed an interest in buying the Egyptian state-run telecommunication company’s holding in the unit. Neither deal was realized.Read more: Vodafone Squeezed in Egypt as State-Backed Partner Turns RivalEarlier this week, Telecom Egypt said it hadn’t received any offers and currently had no intention to sell its stake.Telecom Egypt’s reluctance to sell had been linked in part to its own entry into the mobile-phone market as a fourth operator, rivaling the local units of Vodafone, Emirates Telecommunications Group Co. and Orange SA. The company said in 2018 that it would consider selling its stake in Vodafone’s local unit only when its own market share grows enough that its investment begins to suffer.\--With assistance from Salma El Wardany and Thomas Seal.To contact the reporters on this story: Tarek El-Tablawy in Cairo at teltablawy@bloomberg.net;Abdel Latif Wahba in Cairo at alatifwahba@bloomberg.net;Matthew Martin in Dubai at mmartin128@bloomberg.netTo contact the editors responsible for this story: Riad Hamade at rhamade@bloomberg.net, Michael Gunn, Paul AbelskyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Reuters

    EXPLAINER-As Britain decides, Europe grapples with Huawei conundrum

    Britain's decision on whether to allow Huawei to supply equipment for 5G mobile networks comes at a delicate time, with debate raging in European capitals over the security implications of reliance on Chinese technology. In Germany, Chancellor Angela Merkel's preference for applying the same rules to all equipment vendors faces growing resistance from lawmakers in her own party, who back U.S. calls to ban Huawei outright. Europe's leading telecoms operators, who are all Huawei customers, are lobbying against an outright ban.

  • Moody's

    Digi Communications N.V. -- Moody's assigns a B1 rating to RCS&RDS's new senior secured notes and affirms Digi's B1 CFR; outlook stable

    Moody's Investors Service, ("Moody's") has today affirmed the B1 corporate family (CFR) and the B1-PD probability of default rating (PDR) of Digi Communications N.V. ("Digi" or "DCS"), the parent company for RCS & RDS S.A. ("RCS&RDS"), a leading pay- TV and communications services provider in Romania and Hungary. At the same time, the rating agency has assigned a B1 rating to the proposed E800 million Senior Secured Notes (split into two tranches, due 2025 and 2028 respectively) to be issued by RCS&RDS. Concurrently, Digi Group will use the remaining proceeds (1) to repay E163 million of drawdowns under its Senior Facilities (SFA 2016 and 2018), (2) to cover E33 million of accrued interest and early prepayment fees and transaction costs, and (3) E54 million for corporate purposes.

  • Cryptocurrency News: Another Company Ditches the Libra Association
    Investopedia

    Cryptocurrency News: Another Company Ditches the Libra Association

    Vodafone leaves the Libra Association and numerous central banks to meet and discuss the use of digital currencies.

  • A $21 Billion Telco War Comes Down to $2
    Bloomberg

    A $21 Billion Telco War Comes Down to $2

    (Bloomberg Opinion) -- India’s great telecom melee was bad enough as a brawl between service providers and the state, with operators complaining about the government’s outlandish claims on their past revenue. Now, consumers have jumped into the fray. A confusing three-cornered fight could lead to ugly outcomes: The country’s broken financial system would take a fresh hit; new 5G networks could be delayed; and the government’s annual revenue from the sector might get squeezed.This week, New Delhi wants nearly 1.5 trillion rupees ($21 billion) in back license fees and spectrum usage charges, including penalties, interest and interest on unpaid interest. Before they lost the case in India’s Supreme Court, the telcos maintained the government’s interpretation of what it was owed under the 1999 revenue-sharing agreement to be too broad and unfair because it included even their non-telecom revenue, such as interest and dividend income. It's a Pyrrhic victory for the government because not all the money it wants is coming. Of the 15 firms facing these long-contested demands, most have shut down, sold out or ended up insolvent. All eyes are now on Vodafone Idea Ltd., one of the three private-sector mobile services companies still standing. It has to pay 530 billion rupees by Jan. 23, by government estimates. Even taking Vodafone Idea’s own calculation of the liability at 442 billion rupees, the loss-making carrier’s net debt soars to a life-threatening 1.6 trillion rupees. It may not be able to meet all its obligations.The threat of a bankruptcy was real when I wrote about Vodafone Idea’s grim prospects in November. With the two large shareholders — Britain’s Vodafone Group Plc and Indian billionaire Kumar Mangalam Birla — reluctant to throw more good money after bad, the equity value of the business is hurtling toward zero.Telcos have requested the country’s top court to extend the payment terms. Even if Vodafone Idea stays afloat thanks to a last-minute compromise, customers have read the writing on the wall. The mobile carrier lost 36 million subscribers in November. And that was before all three players raised prices in December. As the churn gets busier, the hypercompetitive Indian market will effectively turn into a duopoly. Bharti Airtel Ltd. and Reliance Jio Infocomm Ltd. will see their market shares settle at around 35% and 45%, respectively, by March 2021, according to Jefferies Financial Group Inc.Where will this leave Vodafone, or the $1.7 billion that the government earns from the current No. 2 player as annual spectrum revenue? Of the many creditors that have exposure to the telco, Yes Bank Ltd. is particularly vulnerable. Saddled with bad loans, the Indian bank is struggling to raise funds as its capital buffers wear dangerously thin. If potential white knights get cold feet because of the lender’s outsize telecom exposure (as much as 29% of shareholders’ funds, including 18% for Vodafone Idea), then the country’s financial system may be looking at a big confidence shock. Worryingly, future profitability of the telecom industry also remains unclear. Blame it on the cost-conscious Indian consumer. With telcos raising prices, using one SIM card for calls and another for data isn’t cost effective any more. Demand will consolidate, and some of it may vanish altogether. Bharti Airtel recently introduced a 179 rupee plan, valid for 28 days, which offers 2 gigabytes of data, unlimited calls, and comes packaged with 200,000 rupees of life insurance. This is a way to lessen the sticker-price shock for entry-level subscribers, especially in semi-urban and rural areas, who are being nudged to trade up from the current 149 rupee basic plan. Expect more such bundled offerings as both Bharti and Jio try to raise their average revenue per user to around 300 rupees, where the economics starts to make more sense.That’s still a ways off, though. Jio, whose aggressive entry three years ago with free voice calls and cheap data triggered cutthroat competition, garnered revenue per user of just 128 rupees — not even $2 — in the December quarter, practically flat from a year earlier. Being a new entrant, Jio isn’t saddled by the government’s revenue demands that have come to haunt Vodafone Idea and, to a smaller extent, Bharti. Until Mukesh Ambani, the deep-pocketed tycoon behind Jio, turns his attention from chasing market share to maximizing returns on his $50 billion foray, pricing will stay irrational and new investment will remain constrained.Although Bharti has raised new equity and convertible debt, at more than 1 trillion rupees, its net debt is onerous. It’s hard to see strong demand at the government’s auction of 5G airwaves in April. Vodafone’s long-standing tax dispute with New Delhi has been a cautionary tale. The business imploding because of another instance of government heavy-handedness will send a fresh bad signal about India’s business climate, though for the country’s telecom industry, the outlook will remain somber regardless of whether Vodafone Idea survives or not.To contact the author of this story: Andy Mukherjee at amukherjee@bloomberg.netTo contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Vodafone Group exits Facebook-led Libra currency group
    Reuters

    Vodafone Group exits Facebook-led Libra currency group

    The association has seen an exodus of its backers including financial companies Paypal Holdings Inc and Mastercard Inc amid regulatory scrutiny. Facebook announced in June last year a plan to launch the digital currency in partnership with other members of the association, but the project quickly ran into trouble with skeptical regulators around the world.

  • Vodafone Abandons Facebook-Led Libra Cryptocurrency Project
    Bloomberg

    Vodafone Abandons Facebook-Led Libra Cryptocurrency Project

    (Bloomberg) -- Telecom giant Vodafone Group Plc left the Libra Association, becoming the latest company to exit the Facebook-led group trying to create a new global cryptocurrency.The Libra Association, which was finalized last October, once expected to have as many as 28 total members when the project was announced in June. It is now down to 20 following earlier departures from Visa Inc., Mastercard Inc. and others that had committed to the project but then left before the group signed an official charter.“Vodafone is no longer a member of the Libra Association,” Dante Disparte, head of policy and communication for the association, said in a statement. “Although the makeup of the Association members may change over time, the design of Libra’s governance and technology ensures the Libra payment system will remain resilient. The Association is continuing the work to achieve a safe, transparent, and consumer-friendly implementation of the Libra payment system.”The idea for Libra -- a global, digital currency intended to make cross-border money transfers as easy as sending a text message -- has faced opposition at every turn. Facebook, the world’s largest social network, first proposed the idea last June, along with a number of high-profile partners. Many of them are no longer involved, and Facebook has pledged to appease all U.S. regulators before launching the currency. It’s unclear how long that might take.Coindesk earlier reported news of Vodafone’s departure from the group.In a statement, U.K.-based Vodafone said it plans to focus on its own digital payments efforts instead. Vodafone partly owns Safaricom Plc, which operates the M-Pesa mobile-payments app in Kenya, where more people keep their money on their phones rather than in banks. The text message-based app is used by about 35 million people globally to spend, borrow and send money to friends and family.“We will continue to monitor the development of the Libra Association and do not rule out the possibility of future co-operation,” Vodafone spokesman Steve Shepperson-Smith said.\--With assistance from Jenny Surane and Scott Moritz.To contact the reporter on this story: Kurt Wagner in San Francisco at kwagner71@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Robin AjelloFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Cordiant Capital aims to raise $350 million for telecoms fund, expands team
    Reuters

    Cordiant Capital aims to raise $350 million for telecoms fund, expands team

    Asset manager Cordiant Capital is looking to raise around $350 million for a telecoms infrastructure equity fund and has hired two veteran dealmakers as it looks to benefit from strong growth in mobile data usage. Canadian-based Cordiant is speaking to potential anchor investors for the fund, Cordiant IX, co-Chief Executive Benn Mikula told Reuters.

  • Financial Times

    Facebook’s Libra loses backing from Vodafone

    project, inflicting a fresh blow to the Facebook-led digital currency initiative. The telecoms group is the eighth backer to pull out of the ambitious project, which has faced intense scrutiny from global regulators and politicians over concerns it could facilitate money laundering and hurt financial stability. Vodafone said on Tuesday that it had made the decision, first reported by cryptocurrency publication Coindesk, to instead redirect its efforts towards its own mobile money payments service, M-Pesa.

  • Exclusive: New Indian law to protect foreign investors to exclude tax demands - documents
    Reuters

    Exclusive: New Indian law to protect foreign investors to exclude tax demands - documents

    New legislation will improve protection for foreign investors in India by offering relief from possible policy changes but will uphold the state's right to tax them, according to its draft and government documents seen by Reuters. The bill also attempts to upgrade India's investment climate and boost foreign investment by setting up new adjudicating authorities to swiftly resolve disputes. It is part of India's efforts to become a $5 trillion economy by 2024, from around $2.7 trillion currently, the documents said.

  • UK's BT, Vodafone may seek PM Johnson's support for Huawei: sources
    Reuters

    UK's BT, Vodafone may seek PM Johnson's support for Huawei: sources

    Britain's BT and Vodafone are considering urging Prime Minister Boris Johnson not to risk the rollout of next generation mobile networks by banning China's Huawei [HWT.UL], sources said, confirming a Sky News report on Friday. Britain is set to take a final decision on Huawei's role in building new 5G networks this month. U.S. government officials have pushed for a total ban on Huawei on security grounds, and reports said they presented new evidence on Monday about the risks of using the Chinese company's equipment, branding it "madness".

  • Franklin Cuts Vodafone Idea’s Debt Value to Zero on Court Snub
    Bloomberg

    Franklin Cuts Vodafone Idea’s Debt Value to Zero on Court Snub

    (Bloomberg) -- Franklin Templeton Asset Management (India) Pvt. marked down its debt exposure to Vodafone Group Plc’s India venture to zero, concerned by the operator having to pay $4 billion in back-fees as early as next week. The carrier’s shares suffered a record plunge.The payment deadline has led to “significant uncertainty with respect to our exposure” to the carrier, the fund house said in a statement on Friday. Shares of Vodafone Idea tumbled as much as 39%, reflecting concerns over the future of the beleaguered company.Local wireless operators including Vodafone Idea Ltd. and Bharti Airtel Ltd. suffered a blow Thursday, when the Supreme Court rejected their appeal against an October verdict requiring them to pay as much as $13 billion for spectrum and license fees. The companies were counting on some relief, such as a reversal of the earlier order, reduced liabilities or staggered payment.The court’s rebuff adds to the woes of India’s debt funds hit by a lingering shadow banking crisis that’s shaken the nation’s credit markets in the past 18 months. The order also puts a severe burden on the survivors of a tariff war sparked by the 2016 entry of billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd., an upstart that disrupted the industry with free calls and cheap data.Both Bharti Airtel and Vodafone Idea, with a combined net debt of about $30 billion, reported record losses in the September quarter.Vodafone CEO Says India Venture Is at Risk of Collapse“Experience in India suggests it is unwise to talk of uncertainties, but it is very hard to see how Vodafone Idea survives,” analysts at New Street Research LLP wrote in a report. “A 2-player outcome would therefore be by far the most likely outcome,” which is positive for Bharti, they said.While Bharti Airtel, run by tycoon Sunil Mittal, has managed to raise the $3 billion it needs to pay from a sale of shares and convertible bonds, Vodafone Idea’s billionaire Chairman Kumar Mangalam Birla has warned that the company may have to cease operations and file for insolvency if the government doesn’t ease their burden.Vodafone Group, the British carrier that owns 45% of the venture, wrote off the carrying value of its shares in Vodafone Idea in its earnings for the half-year through September after analysts flagged the possibility of further impairments.India is open to discussing ways to help ease the payment of these dues by wireless carriers, according to a government official with knowledge of the matter. Stripping out interest from the dues or paying the amount in tranches are some ideas that the government can discuss, this official said.Shares of Bharti Airtel climbed 5.5% at close on Friday in Mumbai after the court order raised the prospects of a telecom duopoly in India. The company’s perpetual, dollar-denominated bonds declined the most in more than two months.Not EasyThe court on Thursday also rejected requests by telecom companies for rehearing the petition seeking relaxations on penalties sought by the government and deadline for the payment.“We wonder how weaker operators like Vodafone Idea will make this payment, and not that Bharti Airtel is getting any respite as the amount has to be paid up,” said Gaurang Shah, vice president at Geojit Financial Services Ltd. “It isn’t easy to raise tariffs and retain customers. It remains to be seen how companies now respond to this decision because the court has twice spelled it out for them.”For two decades, the operators had challenged the way authorities calculated their annual adjusted gross revenue, a share of which is paid as license and spectrum fees. With the October ruling, the court upheld the government’s method, while rejecting the companies’ plea to exclude revenue from non-telecommunications businesses.“We are evaluating filing a curative petition,” Airtel said in a statement after the ruling, an option echoed by Vodafone Idea as well. “The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole.”The government had raised a total demand of around 920 billion rupees ($13 billion) against all telecom operators, including defunct ones, according to filings in the court.Here’s a list of companies and the amount they have to pay to the government:Last year, Vodafone Idea had raised 250 billion rupees from a rights issue.“Vodafone may have some cash through rights issue but it won’t be enough to meet the overall dues,” said Rajiv Sharma, an analyst at Sbicap Securities. “If there’s not enough relief, then it is going to be a matter of time before they shut down.”In the past decade, India has seen a consolidation in the telecommunications industry. Three non-state operators are left now, from about a dozen four years ago. While Vodafone’s local unit announced its merger with Birla’s Idea Cellular Ltd. in 2017, Aircel Ltd. and tycoon Anil Ambani’s Reliance Communications Ltd. slipped into bankruptcy last year. Others including Norway’s Telenor group and UAE’s Etisalat group exited the market.\--With assistance from P R Sanjai, Thomas Seal, Bijou George and Rahul Satija.To contact the reporter on this story: Upmanyu Trivedi in New Delhi at utrivedi2@bloomberg.netTo contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, ;Arijit Ghosh at aghosh@bloomberg.net, Bhuma Shrivastava, Ravil ShirodkarFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Financial Times

    Shares in Vodafone’s India venture plunge after court ruling

    Shares in Vodafone’s Indian joint venture plunged after the country’s Supreme Court upheld a ruling that telecoms companies must pay billions in retrospective licence and spectrum fees. requiring mobile operators to pay $13bn in historic levies. The shares recovered slightly to trade 26 per cent lower following a report that the company, in which the UK group holds a 45 per cent stake, may be able to approach India’s highest court for an extension to a January 23 deadline for it to pay about $7bn.

  • Bloomberg

    India’s Top Court Rules Phone Carriers Must Pay $13 Billion to Government

    (Bloomberg) -- Follow Bloomberg on Telegram for all the investment news and analysis you need.India’s Supreme Court ruled that wireless carriers including Bharti Airtel Ltd. and Vodafone Idea Ltd. need to pay $13 billion of dues to the government, rejecting an appeal by operators struggling to stem losses and reduce debt.A three-judge Supreme Court bench headed by Justice Arun Mishra on Thursday dismissed review petitions filed by the telecommunication companies against the October verdict, according to updates on the court’s website. Under that ruling, Vodafone Group Plc’s India venture has to pay $4 billion, while Bharti Airtel got a $3 billion bill -- all due on Jan. 24.The court also rejected requests by telecom companies for rehearing the petition seeking relaxations on penalties sought by the government and deadline for the payment.The court’s rebuff is the latest setback for the survivors of a brutal tariff war sparked by the 2016 entry of billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd., an upstart that disrupted the industry with free calls and cheap data. Both Bharti Airtel and Vodafone Idea, with a combined net debt of about $30 billion, reported record losses in the quarter through September, and were counting on the court to reverse its order.“We wonder how weaker operators like Vodafone Idea will make this payment, and not that Bharti Airtel is getting any respite as the amount has to be paid up,” said Gaurang Shah, vice president at Geojit Financial Services Ltd. “It isn’t easy to raise tariffs and retain customers. It remains to be seen how companies now respond to this decision because the court has twice spelled it out for them.”Eroding ViabilityFor two decades, the operators had challenged the way authorities calculated their annual adjusted gross revenue, a share of which is paid as license and spectrum fees. With the October ruling, the court upheld the government’s method, while rejecting the companies’ plea to exclude revenue from non-telecommunications businesses.“We are evaluating filing a curative petition,” Airtel said in a statement after the ruling. “The industry continues to face severe financial stress and the outcome could further erode the viability of the sector as a whole.”The government had raised a total demand of around 920 billion rupees ($13 billion) against all telecom operators, including defunct ones, according to filings in the court.Here’s a list of companies and the amount they have to pay to the government:Bharti Airtel recently raised $3 billion from sales of shares and convertible bonds to help meet the payment deadline. On the other hand, Vodafone Idea’s billionaire Chairman Kumar Mangalam Birla warned last month that the company would have to cease operations and head for insolvency if the government doesn’t provide relief measures.Last year, Vodafone Idea had raised 250 billion rupees from a rights issue.Vodafone’s India Unit Chairman Says End is Near If No Support“Vodafone may have some cash through rights issue but it won’t be enough to meet the overall dues,” said Rajiv Sharma, an analyst at Sbicap Securities. “If there’s not enough relief, then it is going to be a matter of time before they shut down.”In the past decade, India has seen a consolidation in the telecommunications industry. Three non-state operators are left now, from about a dozen four years ago. While Vodafone’s local unit announced its merger with Birla’s Idea Cellular Ltd. in 2017, Aircel Ltd. and tycoon Anil Ambani’s Reliance Communications Ltd. slipped into bankruptcy last year. Others including Norway’s Telenor group and UAE’s Etisalat group exited the market.(Updates with background throughout.)\--With assistance from P R Sanjai and Nupur Acharya.To contact the reporters on this story: Upmanyu Trivedi in New Delhi at utrivedi2@bloomberg.net;Ragini Saxena in Mumbai at rsaxena30@bloomberg.netTo contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, ;Unni Krishnan at ukrishnan2@bloomberg.net, Bhuma ShrivastavaFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • 6 Stocks Trading With Low Price-Sales Ratios
    GuruFocus.com

    6 Stocks Trading With Low Price-Sales Ratios

    Vodafone makes the list Continue reading...