Vodafone Group Plc. (VOD) is up over 2.8% this week due to several big announcements. Experts warned investors to put the stock on hold as the company is vying for a game-changing deal. Vodafone, a company with 550 million customers and operations in 25 countries, has a market share of €70 billion with over 108,000 employees.
Vodafone sold off its 45% stake in Verizon five years ago and switched to a major program investment to help offset a loss in revenue from the sale.
The Verizon portion of the company provided nearly 50% of its profits at the time. Small growth and improvement in Europe have helped the company’s stock this week. Vodafone has noted improvements in the UK and European markets.
The company’s total revenue is comprised of 75% Europe, with the remaining coming from Africa, Asia and the Middle East. Highly competitive markets are a concern for Vodafone going forward. The company’s main European markets include Germany, Italy, Spain and the UK, which account for 80% of the company’s European revenue.
Vodafone’s markets are very competitive. Highly regulated, the telecom’s main markets all feature three main competitors, which have resulted in the company’s revenues falling to €47.6 billion. Operating profits rose from the previous year, hitting €3.7billion.
Vodafone’s VodafoneZiggo venture led to the company’s profits rising. Its Indian operations were under higher regulation and a difficult business environment, which led the company’s Indian operations into a merger with a key competitor.
Vodafone investors are optimistic about the company’s immediate future, with reported and confirmed talks between Vodafone and Liberty Global (LBTYA). The talks suggest that Vodafone is not planning a merger, but would rather be acquiring overlapping assets in European countries where both companies operate.
The companies may also be discussing an asset swap that would allow them to reduce costs and increase operational efficiency.
Vodafone is a starting point for many creative minds, with a focus on the company’s Vodafone London operations. Famous film producer Habibullah Afridi, for example, started his career with Vodafone as a graphic designer before moving into film.
Investors remain confident that the company’s stock will continue to rise. Reports earlier in the week suggest that Vodafone and Nokia are creating a 4G network on the moon. The network will be the first of its kind.
Vodafone may also be boosting its profits through the public sector mobile market. The company would benefit from new government plans to offer workers and agencies plans that include voice, text and data allowance.
The company is offering new mobile plans to meet the needs of local and central governments.
Vodafone’s heavy investment in the European market will also pay dividends for the company. The company’s legacy revenues have been falling for years, prompting the telecom to invest heavily on network upgrades, broadband and the Internet of Things. The investments have increased investor confidence in Vodafone’s European market.
The company is under investigation, along with three others, by Ofcom. The regulator suggests that Vodafone may have throttled speeds for customers who went abroad.