Vodafone is still one of the world's biggest mobile operators by global footprint, with a direct presence in 25 countries, and partners or affiliates in many more. The Vodafone brand now reaches over 589m customers worldwide. Its key markets are still mainly in Europe, but it has also established a significant position in India and South Africa. For several years it derived a substantial profit (on paper at least) from a 45% stake in Verizon Wireless of the US. In 2013, after years of on and off negotiation, the group managed to convert that holding into cash, agreeing to sell the shares back to Verizon for a whopping $130bn, then the second largest deal in corporate history. Vodafone originally transformed itself into a global giant with two breathtaking deals at the end of the 1990s in which it acquired US company Airtouch and German industrial and telecoms giant Mannesman. At its peak at the beginning of 2001 it was Europe's most valuable company and one of the world's top 10. More recently, however, performance has stalled in some key markets and the group has come under increasing pressure from its shareholders to find new ways of delivering growth. Several deals have been struck with cable group Liberty Global to acquire or share operations, and build a stronger presence in broadband and cable. VodafoneZiggo of the Netherlands is one such mobile & cable JV, and the group now has almost 19m broadband customers across Europe. (Could Liberty's UK-based Virgin Media eventually become another such joint venture?) Another recently agreed JV (though not with Liberty) is Vodafone Idea, now the local mobile leader in India with 334m customers. Vodafone Australia is a joint venture with Hutchison 3. However the group's most valuable market is Germany, accounting for over a quarter of revenues - £11bn - and more than a third of operating profit. The UK comes next at £7bn, then Italy and Spain. Europe combined contributed three-quarters of reported revenues for the year to Mar 2019, which totalled £43.7bn. (Several of the emerging markets JVs are unconsolidated becaue Vodafone controls less than 50% of equity). The group reported a £7.6bn loss after whopping depreciation and impairment charges, much of them arising from the creation of the Vodafone Idea merger. Nick Read succeeded Vittorio Colao in 2018 as group CEO.
Capsule checked 24th October 2019
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Recent stories from Adbrands Update:
Adbrands Daily Update 18th Sep 2019: In one of the year's biggest account switches, Vodafone moved its global media account out of WPP's Wavemaker and into Dentsu Aegis Network's Carat. Billings are estimated at around £400m annually, making it Carat's biggest win so far this year following what has otherwise been quite a quiet time for the network's new business team. Wavemaker will retain Vodafone's media in a handful of countries where it operates as a joint venture with other companies, such as India, the Netherlands and Australia. All wholly-owned operations transfer to Carat.
Adbrands Social Media 19th Jul 2019: "Be Unlimited". Vodafone UK's new marketing chief Maria Koutsoudakis (recruited from M&S) has dumped those cringeworthy Martin Freeman ads and pushed Ogilvy into creating what is probably the mobile provider's best spot for years. Hard to think it's the same agency that came up with the last couple of campaigns. (Arguably it's not, considering Ogilvy went through that dramatic management overhaul last year). It's always a challenge trying to encapsulate all the different services any mobile provider offers these days, but this spot has life and energy and some arresting visual trickery. A new start, perhaps, for the UK's original mobile brand.
Adbrands Weekly Update 17th May 2018: Vittorio Colao said he will step down as CEO of Vodafone later this year after a decade in his role. His successor will be current CFO Nick Read. That follows the announcement last week of Vodafone's proposed acquisition from Liberty Global of cable TV operations in Germany and three C&E European countries. Vodafone also reported better than expected results for the year to March. Revenues slipped back by 2% to €46.7bn as a result of currencies and the deconsolidation of Vodafone Netherlands into a joint venture with Liberty. However operating profit surged by 15% and net profit rebounded to €2.8bn after the prior year's €6.1bn net loss.
Adbrands Weekly Update 10th May 2018: Mobile operator Vodafone pushed further into cable TV with a deal to acquire the local operations of John Malone's Liberty Global group in Germany, the Czech Republic, Hungary and Romania. Enterprise value of the deal is estimated at €18.4bn. Vodafone already has a substantial mobile presence in Germany, and owns the leading cable provider. The addition of Liberty's Unitymedia, its biggest domestic cable rival, creates an even stronger challenger to local broadband and telecoms leader Deutsche Telekom. Vodafone Kabel and Unitymedia currently serve different areas of the country, so there is no geographic overlap between the two, reducing the likelihood of regulatory issues. Liberty's UPC is the dominant cable provider in the Czech Republic and Hungary and a strong #2 in Romania. However, the merger is expected to provoke considerable opposition from Deutsche Telekom - the main rival in all four markets - as well as traditional broadcasters. Telekom CEO Timotheus Hoettges recently told investors "There will be no way that this deal is going to be approved and for us it's completely unacceptable." The purchase will be made with a mixture of cash and bonds. Most observers expect Liberty to respond with a deal of its own to strengthen its remaining cable operations in Europe, not least in the UK, where it owns Virgin Media.
Adbrands Weekly Update 15th Mar 2018: Ads of the Week: "Raising Voices". Here's an admirable campaign from Santo - part of WPP's dedicated Team Red team - for Vodafone. Shame it didn't make more noise about itself in advance of International Women's Day last week. It's a brilliantly effective approach, though, and all credit to Vodafone for tackling the issue head on. So in the spirit of true equality would it be unfair of us to ask another question: "Why are only two of Vodafone's 14-strong executive team women?"
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