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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Vodafone Group Plc VOD London Ordinary Share GB00BH4HKS39 ORD USD0.20 20/21
  Price Change Price Change % Stock Price Last Trade
-1.16 -0.92% 124.56 16:35:19
Open Price Low Price High Price Close Price Previous Close
124.44 123.18 125.92 124.56 125.72
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Industry Sector
MOBILE TELECOMMUNICATIONS

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DateSubject
24/2/2021
16:45		monte1: Vodafone confirms massive IPO and big dividend by Graeme Evans from interactive investor | 24th February 2021 13:40 Share on: The float of its Vantage Towers business has been well flagged, but we now have more detail. One of the biggest IPOs of the year was unveiled today when Vodafone (LSE:VOD) confirmed plans for the Frankfurt flotation of its vast European mobile phone towers business. The listing of Vantage Towers will take place before the end of March and should prove attractive to investors wanting exposure to the roll-out of 5G services in Europe. A promised pay-out ratio worth 60% of free cash flow will add to the appeal for income investors, with a €280 million (£241.5 million) dividend scheduled for payment in July, and the company targeting mid-to-high single-digit growth in cash flows beyond that. For Vodafone investors, the significant proceeds from the “meaningful221; minority free float will help to pay down some of the FTSE 100 index company's debt, which stood at €44 billion (£38 billion) at the end of September. The trading of the Vantage stake should also enable City analysts to fine tune their valuations on Vodafone's infrastructure assets. Shares were today 2% lower at 127.18p, having fallen back in recent days after an encouraging third-quarter trading update at the start of February. The IPO pricing details are still to be confirmed, but speculation this week has suggested the Vantage business could be valued at about €15 billion (£13 billion). Dusseldorf-based Vantage boasts 82,000 sites across 10 countries and is the number one or two largest in nine of its ten markets. Vodafone said Vantage was seeing strong “commercial momentum”, with about 1,400 new tenancies expected in the nine months to next month. And driven by mobile data growth and the 5G roll out, Vantage is on track to build 550 new sites in the current financial year and has commitments for a further 7,100 sites by 2026. Vodafone said: “The European tower market is in the early stages of its evolution and Vantage Towers believes that its high quality infrastructure, which offers superior locations and nationwide coverage, is well-positioned to benefit from the market's growth.” It also noted that the commercialisation of tower infrastructure companies is still a developing trend in Europe, with substantial room for growth compared with other more mature towers markets such as in the United States. The customer base is underpinned by its anchor tenant relationship with Vodafone, which is Europe's largest mobile operator by subscriber numbers, as well as relationships with other leading mobile operators. Inflation-linked contracts also offer visible and resilient revenue and cash flows from its existing business with "built-in" growth. The European focus of Vantage means Vodafone has chosen Frankfurt over London for the flotation. Towers chief executive Vivek Badrinath said: "The IPO is an important milestone and sets the foundations for the next stage of our growth within the dynamic towers industry.”
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20/2/2021
07:59		waldron: Orange CEO Says It’s Time to Talk About a European Tower Merger Helene Fouquet, Bloomberg News Parabolic antenna sit on the Rocacorba broadcasting tower alongside a yellow satellite dish in Girona, Spain, on Thursday July 16, 2020. Cellnex Telecom SA is considering bidding for a stake in CK Hutchison Holdings Ltd.’s European wireless tower business, according to people familiar with the matter, as it scouts for new acquisitions. Photographer: Angel Garcia/Bloomberg , Bloomberg (Bloomberg) -- Orange SA is calling on Europe’s other big phone companies to begin talks about a merger of their wireless towers, an alternative to a full-scale tie-up of the region’s carriers that risks being blocked by European regulators. The French company’s Chief Executive Officer Stephane Richard made the call to Vodafone Group Plc, Deutsche Telekom AG and others on Thursday after announcing the separation of Orange’s domestic and Spanish tower assets into a standalone unit. “We’re looking at those across Europe who share our vision to not sell towers, to join forces and constitute together a real, very powerful tower company,” Richard told reporters on Thursday. Struggling European phone companies have been splitting off their wireless mast and fiber businesses to attract investors and cut the bill for future investments. Spanish tower operator Cellnex has bought a lot of those assets, and last month American Tower Corp. agreed to buy more than 30,000 towers from Telefonica SA for 7.7 billion euros ($9.3 billion) in its first concerted push into Europe. Orange May List Or Sell Stakes in New European Tower Company For Richard, an outright sale of Orange’s towers to an independent player like Cellnex would harm the long-term interests of France’s dominant phone company. He prefers a combination with the infrastructure of other European phone operators to create a company that can “compete with Cellnex and reach the same size as Cellnex.” Richard said no talks are under way right now, but Orange has received signs of interest in potential infrastructure consolidation. Orange’s new tower business, named Totem, will be operational by the end of the year and may eventually include Orange tower assets in more countries. How a tower merger might happen is still unclear: While Richard said he’s ready to list Totem or sell stakes to investors, he said Orange won’t give up control of the business as the price of a merger or sale.
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31/1/2021
12:51		muscletrade: Extract from Telegraph, nothing new but better than a sell recommendation. You would expect Vodafone, now a provider of internet access as well as mobile phones, to be holding up well during the pandemic. So it is – but the consequences of Covid-19 go beyond the millions of captive customers working from their kitchen tables. The profitability of mobile and broadband firms does not depend only on keeping customers happy: the decisions of regulators are important too. And the pandemic is changing the watchdogs’ attitude to Vodafone and its rivals across Europe, where the firm makes most of its money. Regulators and politicians have realised how much a locked-down economy depends on fast, reliable internet access in people’s homes. They, like the rest of us, also realise that working from home is here to stay even when the virus is defeated. They won’t get those fast, reliable networks if their price controls are so strict that broadband companies are denied a decent return. They also know that broadly speaking, consumers are not paying an excessive price for their broadband or their mobiles. So there are signs that they are beginning to loosen the reins a little, investors in the sector told this column. This alone should be enough to get investors to take another look at Vodafone, long a disappointment to the City. But more is going on. But these markets are still highly competitive and Vodafone, once a highly centralised organisation, has recognised that you have to respond to competition at the country level. So it now lets local managers decide how to react to developments in their markets. The advent of 5G will also encourage some customers to spend more in return for higher data speeds. Vodafone has also taken action to reduce costs. Customers who have problems are now able to deal with them themselves via apps – a less frustrating experience than hanging on for a call centre. So Vodafone can spend less on its call centres – and on its shops – and customers are happier, so they are more likely to remain loyal. “Churn” rates have fallen from 16pc to 13pc over the past three years. Hanging on to your customers is of course cheaper than acquiring new ones. Then there is what Vodafone is doing with its masts business. It has created a separate company called Vantage, which now owns 68,000 base stations. Vantage is due to list on the stock market, probably in Frankfurt, later this year and the proceeds will be used to reduce Vodafone’s debt pile, which is on the high side. We can hope for a boost to the shares as a result because institutional shareholders tend to shy away once debts exceed a certain level relative to profits. Vodafone will retain a controlling stake in Vantage for the moment at least, so that it can continue to decide where its masts are located. The company’s glory days of explosive growth are a long way behind it. The most shareholders can hope for is a gentle rise in profits as cost control, adroit pricing and operational efficiency come into their own. The end of travel restrictions, which have hobbled mobile firms’ normally lucrative roaming income, will also help. But it makes sense to buy the shares only if current levels of profitability are not being properly valued by the market. Key to this judgment is the dividend. The headline yield figure of 6.3pc looks attractive but the divi is only now starting to be covered by profits. If dividend cover were at the level often regarded as safe, namely two, the yield would be a less enticing if still useful 3pc or so. More positively, the fact that dividend cover is going in the right direction means that we need not fear a cut, even if any rise will probably have to wait for debt levels to fall further. Questor’s view when we last looked at the stock in May 2019 was that there was no reason for new investors to get on board, although there was equally no reason for existing holders to sell. Now, in view of the improving regulatory outlook and the hopes for improving profits, better dividend cover and falling debt, we will upgrade to buy. Questor says: buy Ticker: VOD
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18/1/2021
11:54		diku: Below from the above post...can somebody tell me why should it have a strong demand from investors when not under VOD umbrella?...but whilst currently under the VOD umbrella...VOD shares don't command a premium...am I missing the plot?... Vodafone aims to capitalise on strong demand from investors for telecoms infrastructure assets, but it has been a tricky separation through the pandemic. Vodafone, Europe’s biggest mobile operator, played no small part in creating that gap. Its previous chief executive, Vittorio Colao, was a firm opponent of selling off what he saw as the family silver.
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18/1/2021
11:36		geckotheglorious: Vivek Badrinath, chief executive of Vantage Towers: 'I won't have Vodafone interfering in my life' Europe’s biggest mobile operator is selling off its masts under a new company called Vantage Towers When Vivek Badrinath was asked to leave Vodafone, on one level he was relieved. After three years jetting around the pre-pandemic world, selling off far-flung parts of the mobile empire as head of its non-European businesses, he was tired. “You spend two nights a week sleeping on a plane,” he recalls. “It’s the kind of job you do for some time and then at some point the music has to stop.” This was autumn 2019 and Vodafone’s chief executive, Nick Read, was asking Badrinath to lead his biggest sale yet on his way out. Saddled with too much debt from expanding its German broadband network, the operator needed to spin off and cash in its portfolio of 80,000 mobile masts across Europe. Badrinath leapt at the chance to lead the new company, now called Vantage Towers. “Nick came to see me in my office and said ‘Vivek I need to talk to you about something’. He told me about the opportunity and to think about it in the morning and by 5pm I was in his office telling him not to waste time thinking about other people for the role.” Little over a year later Vantage is almost ready to make its debut on the Frankfurt stock exchange at an expected valuation of more than €20bn (£17.8bn). Vodafone aims to capitalise on strong demand from investors for telecoms infrastructure assets, but it has been a tricky separation through the pandemic. “This is a startup that’s been born in a few hundred living rooms, home offices and children’s bedrooms,” says Badrinath. “And yet now we are coming to life.” Mobile operators themselves are out of favour with investors due to low growth and tight margins, under pressure from tough competition, tight regulation and the need for continuous investment in new equipment to meet demand for data. However companies who own the masts, or towers, on which that equipment sits are viewed as strong growth prospects with dependable, high-margin income from rent paid by their mobile operator tenants. Only in recent days Telxius, a mobile mast business spun out of the former Spanish state telecoms monopoly Telefonica, has been sold to an American towers specialist for €7.7bn, more than 30 times its trailing income. Last year in the UK the mobile masts arm of Arqiva, which rents access to all four operators, was acquired for £2bn. The buyer, Cellnex, went on to secure a €10bn pan-European takeover of masts owned by CK Hutchison, the owner of Three, including its UK sites. Vodafone’s UK masts, which are shared with rival O2, are to be rolled into Vantage under a deal thrashed out only last week. They will add €62m of annual earnings to take the total pot to €742m. At the same valuation maths as Telxius that would make Badrinath’s new venture worth getting on for €23bn. “The sector is exciting,” says the 51-year-old, who climbed the ranks of France’s former state operator, Orange, then made a detour into the hotel business with Accor, before joining Vodafone in 2016. “There is this big trend towards the commercialisation of towers and Europe is maybe 20 years behind the US.” Vodafone, Europe’s biggest mobile operator, played no small part in creating that gap. Its previous chief executive, Vittorio Colao, was a firm opponent of selling off what he saw as the family silver. Read clearly sees things differently, and Badrinath says the mobile world has changed such that owning and controlling masts is not so much of a competitive advantage. “It was a chief technology officer on the mobile side of Orange in 2004,” he says. “At that point in time the battle was probably still around coverage. “But once the main operators reached 90pc-plus coverage they lost the ability to differentiate just because they own a mast site. Now it is more efficient economically, operationally and for the environment to share the load of heavy duty infrastructure.̶1; Badrinath’s task is to convince more operators across its 10 European territories mobile industry to rent from it. While its relationship with Vodafone, which will remain a majority shareholder, is guaranteed, it needs to deliver growth by increasing the average number of tenants on each of its masts. The figure is currently 
less than 1.5. Vantage is confident the sheer demand for mobile data – he expects an increase of 2.4 times by 2025 – will boost occupancy. Developing 5G networks to cope will require denser patterns of masts, especially in cities, and sharing space will make sense for all. “It’s not just that we’re taking to the bank the number of contracts that we have for the existing networks,” says Badrinath. “There is growth for a number of reasons. There is absolutely no doubt that 5G will entail the need for more network and more capacity. Governments are selling spectrum on the condition that coverage is developed too.” Some mobile operators claim equipment breakthroughs have reduced the need for more masts, but even with its current 86pc revenue dependence on Vodafone, Vantage has more than 7,000 in the works. Badrinath says the question is one of timing, not need. “The need may not be instant,” he says. “Our model expects bigger densification after 2025, but it will come.” Following a court defeat for the European Commission’s competition watchdogs last year, hopes have risen among mobile operators that they may be allowed to consolidate via mergers. Such a wave might reduce the number of potential customers for Vantage over time, but Badrinath insists Vantage’s long, country-by-country Vodafone contracts and existing market structures would shield it. Vantage is not only depending on technological forces to deliver on high expectations for its independent future, anyway. Badrinath has been busy sharpening up its commercial operations, with a new sales staff to forge relationships with new customers. Meanwhile he plans to negotiate harder with the freeholders who it rents from. “What we have learned is we are good at managing masts from a technical point of view. We’ve been doing it for 25 years, so we should get no credit for that really. “Where we are not as good is on the commercial side and an area we can probably do better is landlord management. So I stood up a team and we’ve been hiring hungry commercial people from outside Vodafone. He or she doesn’t quite look like the nerdy, techie who is inside the operations.” For some Vodafone shareholders, the decision to list Vantage in Frankfurt rather than London is a disappointment. It reflects the company’s centre of gravity, however. It will have more than 19,000 German masts compared with a 50pc share in 14,200 in the UK, and most of its technical staff are based there. London stock exchange rules would also prevent a German corporation with less than 50pc of its shares in a free float from obtaining a premium listing, potentially cutting Vantage off from large pools of capital. “Germany was the most logical place to run this company from, that’s very clear,” says Badrinath, who will be overseen by chairman Rüdiger Grube, a veteran industrialist who “understands corporate governance and the need to give independence to the company in a very clear way”. “I won’t have Vodafone interfering in my life on operational and commercial decisions,” he adds, aware that potential new customers may be nervous of the link, at least at first. “We took care of that. It’s done, it’s put to bed.” It is perhaps a sign that as Badrinath and Vantage advance, Vodafone may be somewhat diminished.
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12/11/2020
00:04		vodman1: By Jem Bartholomew Nov. 11, 2020 6:22 am ET SAVE PRINT TEXT Investors have lost their appetite for U.K. stocks amid deadlocked Brexit talks, rising coronavirus infections and a sharp economic downturn. The U.K.’s FTSE 100 index, the benchmark for the largest British companies, has plunged 18% this year in dollar terms and the FTSE 250 has dropped 13%. In contrast, the pan-continental Stoxx Europe 600 has slid 3% in dollar terms, the French CAC 40 has fallen 5% and the German DAX has gained 5%. In the U.S., the S&P 500 has advanced 10%. “Sentiment has really soured toward the U.K.,” said Patrick Spencer, managing director at U.S. investment firm Baird. “It’s basically universally hated and under-owned.” Net assets in U.K. large-cap equity funds Source: Morningstar .billion U.K. votesto leave the EU. 2013 '14 '15 '16 '17 '18 '19 '20 0 50 100 150 200 $250 Investors say the Covid crisis has impacted the U.K. worse than many other major economies. “The Covid situation has definitely hit us as hard really as anybody else, [and] the nature of our economy being heavily service-driven and consumer-driven will be definitely damaged more than an export or manufacturing economy,” said James Athey, senior investment manager at Aberdeen Standard Investments. “In the very near term, I would say the U.K. doesn’t look particularly attractive.” Coronavirus cases were rising by around 96,000 a day in England in October, according to Imperial College London, causing Prime Minister Boris Johnson to impose another lockdown in England to contain the spread. Brexit adds further uncertainty to markets, with less than two months to strike a trade deal with the European Union before the U.K. loses regulatory parity with the bloc by default. Since August, when the likelihood of reaching a deal diminished, and after Prime Minister Boris Johnson said in September the U.K. would break international law to override last year’s withdrawal agreement, there have been clues markets were pricing in a hard Brexit. Net flows to U.K. large-cap equity funds, estimates Source: Morningstar .billion U.K. votesto leave the EU. 2013 '14 '15 '16 '17 '18 '19 '20 -4 -2 0 2 4 6 $8 Investors pulled $641 million from U.K. large-cap equity funds in September, according to data provider Morningstar. The figure for August was even higher, with net withdrawals of $1.6 billion. That was the largest monthly outflow since $1.8 billion left such funds in June 2019. U.K. equity markets struggling is primarily “a Brexit issue rather than a Covid issue, [but] I don’t think Covid has helped matters,” said James Beaumont, multiasset fund manager at Natixis Investment Managers. In the wake of the pandemic, the government has injected billions of pounds of fiscal stimulus into the economy, and the Bank of England said Thursday it would step up bond purchases as the second wave of infections and the new lockdown threaten to crimp the economy. The central bank forecasts the economy will shrink 11% in 2020. Government borrowing is projected this year to climb to around £350 billion, equivalent to $464 billion, or around 17% of gross domestic product, according to an estimate by the Institute for Fiscal Studies. A closed restaurant in Covent Garden in London. PHOTO: CHRIS RATCLIFFE/BLOOMBERG NEWS The U.K. has an “unenviable mix of one of the biggest fiscal spending packages in the world, but one of the worst growth outcomes,” said NatWest Markets’s Global Head of Desk Strategy James McCormick. “The U.K. equity market appears to be great value at the moment, but the question is, is it a value trap?” said Mr. Beaumont, referring to mature companies delivering healthy dividends for shareholders now, but with poor prospects for growth. He is slightly underweight U.K. stocks, seeing British indexes as full of old-line industrial and financial companies that have suffered during the pandemic. Mr. Beaumont said the exodus of capital is mainly flowing to the tech-heavy growth stocks that investors hope will outperform. There are fewer fast-growing tech stocks in the U.K. Sterling has gained ground in recent months, complicating the picture for companies. It rose from $1.25 at the start of July to a high of $1.34 on Sept. 1, and is currently trading at around $1.32. The main equity indexes have a high concentration of firms that make much of their money outside the U.K. and benefit from a weak pound. In a typical year, around 70% of revenues generated by FTSE 100 firms and around 50% for FTSE 250 companies is drawn from overseas operations. “A lot of the U.K. stocks are essentially foreign stocks listed in the U.K., so they could do well if sterling goes down,” said Tristan Hanson, multiasset fund manager at M&G Investments. From the Archives As One Brexit Countdown Ends, Another Begins YOU MAY ALSO LIKE UP NEXT As One Brexit Countdown Ends, Another Begins As One Brexit Countdown Ends, Another Begins The U.K. is finally leaving the EU, but the Brexit drama isn’t over, as the country enters a new phase of negotiations with its trading partners. (Originally published Jan. 31, 2020) Some investors are more positive about the U.K.’s economic outlook and think now is the time to buy. “The U.K. [market] is in the bargain bin,” said Mr. Spencer, who believes there is a good chance of some form of Brexit deal before the end of the year. “This could prove to be the best buying opportunity in 40 years.” Meanwhile, this week’s positive news regarding Pfizer Inc.’s coronavirus vaccine candidate lifted U.K. equities. “We saw on Monday a vast rotation out of growth and U.S. tech [stocks] and into value [stocks],” said Mr. Beaumont, who added that the shift was a “drop in the ocean compared to how much growth has outperformed value in the last three years.” Mr. Beaumont hasn’t changed his slightly underweight U.K. equities position and is likely to await a Brexit agreement before adjusting his strategy. The pockets of optimism remain in conflict with investor outflows. With Brexit negotiations dragging and Covid-19 uncontrolled, “the U.K. has a problem right now,” said Mr. McCormick.
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11/11/2020
16:41		grupo guitarlumber: Vodafone’s prospects and 7% dividend yield remain undervalued by Graeme Evans from interactive investor | 11th November 2020 15:07 Share on: The shares are up over 10% this week, but there should be much more to come, argues this expert. vod tower The potential for a re-rating of Vodafone (LSE:VOD) shares was raised today when a leading industry analyst signalled the mobile phone giant is over the worst of its revenues downturn. UBS's Polo Tang said next Monday's second-quarter and half-year results were likely to represent a low point, with Q2 service revenues set to be 2.3% lower due to the impact of travel bans on roaming activity. He expects a recovery in the current quarter to 1.2% lower and says shares should be trading at 188p, compared with the 116p seen this afternoon after a rally of 9% so far this week on the back of the Pfizer vaccine breakthrough. The FTSE 100 stock is still no better off than in August, with Vodafone and BT (LSE:BT.A) among telecom stocks shunned in the pandemic despite their exposure to working from home trends. Vodafone shares: 8% dividend yield and potential to double Vodafone: Q1 results and an IPO in 2021 Vodafone: the logic behind 80% share price upside explained Take control of your retirement planning with our award-winning, low-cost Self-Invested Personal Pension (SIPP) Data usage on both mobile and fixed broadband continues to grow strongly, which should drive average revenues per user amid evidence that consumers are willing to pay more for services. The recent launch of a new 5G iPhone should stimulate demand, with Tang noting anecdotal evidence that Vodafone has performed relatively well in Germany, the UK and Netherlands. Tang thinks that the share price currently assumes no improvement in service revenues, leading to low-to-mid single digit annual earnings declines. He said: “While the shape of any recovery may not be linear, we see Vodafone as too cheap and see scope for the shares to re-rate as European service revenues recover.” The company has a loyal following among retail investors, based on factors such as its sheer size, cash generative ability and chunky dividend yield, which, at a projected 7.3% for 2020 trading, is attractive when many big companies have chosen not to pay out at all. UBS is not alone in thinking the company is undervalued, with Deutsche Bank recently highlighting a 230p price target based in part on the value of infrastructure assets and the prospect that the company will resume growth next year. A day after its Q2 update, Vodafone will shine a light on the broader value of the company's assets when it hosts a capital markets day for the planned Frankfurt IPO of Vantage Towers, which boasts 68,000 towers and leading positions in almost all of its nine markets. Vodafone: the logic behind 80% share price upside explained Take control of your retirement planning with our award-winning, low-cost Self-Invested Personal Pension (SIPP) Deutsche analyst Robert Grindle said recently that deals elsewhere in the sector had given a favourable view on assets within Vodafone, which he calculated were the highest of the European telco large-caps and equivalent to 75% of enterprise value. UBS's Tang thinks that next week's guidance from Vodafone will continue to point to a broadly flat underlying earnings picture for the full year and free cash flow in the region of more than 5 billion euros. European service revenues are forecast to be down 3.5% in the second quarter, improving to a fall of 2.1% in the current quarter. Deutsche recently noted the biggest threats to the Vodafone recovery as increased competition, foreign exchange volatility and execution risk on recently acquired assets from Liberty Global, as well as longer term economic malaise due to Covid-19. These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
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29/10/2020
22:34		vodman1: For many households, this year’s shift to home working has made broadband connections as essential as electricity. If investors start to see them that way, one of Europe’s worst-performing sectors could finally turn a corner. Even as internet stocks have soared this year, shares in European internet providers have tumbled: The Stoxx Europe 600 telecom sector is down 12% in dollar terms, twice the fall of the wider index. Enterprise value / forward Ebitda* for StoxxEurope 600 industry sectors Source: FactSet *Earnings before interest, taxes, depreciation andamortization .times Telecoms Utilities 2016 '20 5 6 7 8 9 10 The pattern is familiar: Europe’s once-mighty telecom stocks have been shedding value for half a decade amid fierce competition, heavy investment requirements and regulatory challenges. The pandemic has hit international travel and hence lucrative roaming revenues, giving investors another reason to stay away. Yet the interest of private equity in their assets offers a hint that telcos might find a new place in investor portfolios. NEWSLETTER SIGN-UP Markets A pre-markets primer packed with news, trends and ideas. Plus, up-to-the-minute market data. PREVIEW SUBSCRIBE Infrastructure specialists are prepared to pay more for networks than stock pickers are for operators. Last week, Telecom Italia agreed to sell 37.5% of its last-mile network to KKR Infrastructure for €1.8 billion, equivalent to $2.12 billion. The implied enterprise value was about 8.6 times earnings before interest, taxes, depreciation and amortization; Telecom Italia itself trades for about 5.3 times. Italy’s former phone monopoly is under political pressure to roll out all-fiber broadband in its home market, but it already has a heavy debt load. Bringing in KKR is a way to fund the project without diluting shareholders. Such moves arbitrage a gap in different investors’ return horizons, says James Ratzer, head of European communication services for stock research firm New Street Research: Whereas stock pickers want dividends within a few years, infrastructure investors seem willing to accept between four and seven years of cash burn on fiber-to-the-home programs in exchange for the promise of healthy returns beyond. It isn’t just in Europe: In July, Altice USA sold almost half of its Lightpath fiber business to Morgan Stanley Infrastructure Partners. Valuations tend to be higher in the U.S., a less regulated market, but there was still a big gap between the deal price and public stock multiples. A parallel divergence exists between the valuation of mobile towers and operators, prompting mobile providers to sell off masts. In June, debt-encumbered Spanish giant Telefónica sold a German tower portfolio to Telxius, a separate company it owns in partnership with KKR and another investor, for a remarkable 23 times Ebitda. No wonder Telefónica’s rival Vodafone, whose stock changes hands for roughly six times, is working on a partial initial public offering of its towers early next year. All this financial engineering highlights the value locked up in Europe’s internet providers. Just as important, though, is what the appetite of specialist investors for politically sensitive data conduits says about how the industry has changed. At least in Europe, telecom infrastructure is looking more and more like a regulated utility. To see it that way, stock investors will need a better sense of the returns that will eventually flow from expensive fiber and 5G investments. Yet the shift could, at some point, transform the sector’s stock-market fortunes. The regulated cash flows from utilities are appealing in an era of ultralow interest rates. Europe’s utilities change hands at enterprise values of almost 9 times Ebitda, much better than the 6.1 times average multiple for telecom operators. Europe’s internet providers have had an abysmal five years. The next five might be better.
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04/9/2020
15:10		spud: Vodafone Idea open to anything that might help it survive Scott Bicheno Written by Scott Bicheno 1 day ago https://telecoms.com/506340/vodafone-idea-open-to-anything-that-might-help-it-survive/ Reports from India suggest beleaguered telco Vodafone Idea is considering a share sale and even investment from Verizon to keep it alive while it pays off the government. Bloomberg Quint reckons Vodafone Idea is looking to raise a cool $1.5 billion, following the final Supreme Court ruling, compelling it to hand over many times that much in historical license fees to the government over the next decade. The company has repeatedly warned that being forced to pay up might drive it out of business, but it looks like it’s not ready to throw in the towel just yet. The Bloomberg piece says a share sale may form part of the fund-raising strategy and also talks about it trying to get US investors interested in taking a piece of the action, without naming any. Livemint, however, does and flagged up Verizon and Amazon as potential investors. Google had previously been rumoured to be in the running, but Vodafone Idea is apparently only interested in working with companies whose name ends in ‘zon’ these days. All this speculation seems to have given Vodafone Idea’s share price a decent boost, which is interesting since both moves would presumably involve diluting the stake of existing shareholders. One conclusion to be taken from this is that a high probability of bankruptcy had been priced into the shares and, now that the company is showing a bit of fight, investors are a bit less pessimistic. spud
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13/5/2019
12:56		muscletrade: Article from pro active investor a week or so ago...... If Vodafone cuts its dividend, 60% of investors see the stock rebounding within six months Around two thirds of institutional investors believe Vodafone Group PLC (LON:VOD) should cut its dividend, a survey by JPMorgan Cazenove has found. The investment bank's survey of buyside clients, which includes asset managers, hedge funds and other institutional investors, was launched with the aim of gaining a “better understanding what investors think about Vodafone’s operational, dividend and balance sheet outlook”. Excluding those who have a “directional view” on the shares, 71% of investors believe the telecoms giant should cut its dividend, a proportion that falls to 61% if including all the 130 investors polled. Among those investors that are uninvested on the shares, index-weight or underweight, 77% would welcome a cut to the payout. Meanwhile, opinions are much more divided among investors who are overweight the stock, with 38% favouring a cut, 49% are opposed and 14% are unsure. In the event of a cut, half of investors believe the dividend should be rebased at least 30%. With strong backing for the FTSE 100 group to reduce leverage to less than 2.5 times underlying earnings (EBITDA), supported by 63% of investors. Some 84% want to see management sell off some assets. If Vodafone does effect a dividend cut, 63% of investors in the survey believe the company’s shares will fall on “day one” of a potential cut but, “more interestingly”, the JPMorgan analysts said, almost the same amount believe the stock will finish up six months thereafter, with a similar ratio across investors both over- and under-weight the stock. The survey also found that only 2% of investors have fund rules that require them to sell some/all of their shares in the event of a dividend cut. “This suggests the technical overhang of a cut may be much less than feared.”
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