Boston, MA 10/17/2013 (wallstreetpr) – For the UK’s third largest telecoms company, the market situation presents both opportunities and challenges to contend with. There is no template guide on how things should be done, but the company is banking on the strategies that it has already started to give it a happy stay in the market. That is the situation for Vodafone Group Plc (ADR) (NASDAQ:VOD)
Analysts have had their take on the stock. Others have been kind with it while others can’t quite clearly foresee any reprieve for VOD in the hot-red telecoms industry in the UK and Europe at large. Nonetheless, the company is not anywhere near the danger zone. It might not be cruise in revenue at the speed of a rocket; it in recent times, VOD is enjoying market traction which is good news.
But it is not just about gaining traction, the issued is where these tractions are coming from. For VOD, the emerging markets are responding really well. The company is expecting higher returns on investment in the emerging markets as well as the overall telecoms market due to its low infrastructure cost.
Then the company’s ambitious and spirited shift to more data business is also expected to pay off in a big way. There is a huge market potential for this business segment in the Eurozone. The greatest challenge for telecoms providers, not just VOD, in Europe is the declining service revenue. And there are many factors to this, and some of these factors are not expected to ease anytime soon.
For example, the Eurozone generally has very stringent regulatory requires which have the effected of deteriorating service revenue for the players. Of course, this explains why investors at At&T, a telecoms operator in the U.S., are dragging their feet in allowing the company to invest in Eurozone.
The problem with Eurozone telecoms industry doesn’t just stop with stringent regulatory requirements, but also a hot-red market battle for the subscribers. It requires strong financial muscles and out-of-the-ordinary strategies. At least VOD has both in some measure; its sale of 45% stake in Verizon Communications at $130 billion is fat cash to power the campaign for subscribers and boost revenue. Then on strategy, the mobile operator is in a lot of deal talks for takeover and partnership. It is also scaling up is 3G provision and rolling out its superfast 4G network.
One of the deals on the cards and which has finally come to a close is the acquisition of Kabel Deutschland. This deal is expected to give VOD greater leverage in the Germany’s mobile, TV and data markets. The possible market gains are 7.6 million TV subscribers, 32.4 million mobile subscribers and around 5 million in broadband market share.
