Boston, MA 10/16/2013 (wallstreetpr) – The Vodafone Group Plc (ADR) (NASDAQ:VOD)’s takeover of Kabel Deutschland, a leading German cable company, has been a long time coming. Now it has come to complete, perhaps successfully as VOD announced 76.57% stake in the company.
With all indications, VOD is spoiling for a big market share wall and it has already put its competitors on red notice. The third largest telecoms operator in UK recently sold its stake 45% in Verizon Communications, another telecoms firm of repute in the U.S., for a whopping $130 billion. With the proceeds, VOD is returning most of it to the shareholders in dividends.
The company has also earmarked $30 billion majorly for debt reduction and financial growth plans. And for its ambitious fast-speed network program – 4G, VOD has around $10 billion investment budget for laying out fibre optic cable to better its European broadband internet coverage.
Generally, VOD has a mixed bag of opportunities and challenges to chew over as it seeks to topple its rivals from glory and ascend to their position. Obviously the way up is tricky and there is no room for error lest it become a victim of its on plotting.
The notable positives for VOD are its growing traction in emerging markets. The company also has lower infrastructural costs to deal with.
The company’s spirited shift to more data services is, among the aforementioned strengths, expected to increase its revenue collection.
The company’s blot though is in the form of deteriorating revenue from service business segment in European nations which is no doubt one big headache for VOD.
If VOD manages to expand its emerging market share more in Eastern Europe, Africa and India, and perhaps succeed to block its competitors in the lucrative segments of these markets, it can off-set the challenge present by dwindling service business in Europe.
Another opportunity for the company is to grow the penetration of its 4G network in the already saturated European wireless market to deal with low performing service provision. Apparently, VOD, a $173.32 billion company, has the strategy and financial power to drive these growth opportunities and it won’t belong before investors witness profits explosion.
