UK cellco merger in doubt, Vodafone outlook improves

MOST READ
LATEST NEWS

EVENTS

Join Orange, Amazon and Google at the Open Mobile Summit London May 29-30

MARKET PLACE

Carrier Broadband Performance: Africa & Middle East

Voice over LTE: Market Analysis and Forecasts

Advertize your telecoms job

JOBS

Experienced Event Organiser

UK cellco merger in doubt, Vodafone outlook improves

By CAROLINE GABRIEL

Published: 4 February, 2010

Continued ...

In a statement issued yesterday, the OFT said: "Our initial view, following consultation, is that the joint venture threatens significantly to affect competition in mobile telecommunications in the UK. Thus we have requested that we carry out an investigation. If the request is granted, the OFT intends to examine the proposed joint venture with a view to deciding whether it should be referred to the Competition Commission for an in-depth investigation."

This could delay the merger by at least six months and even impose sufficiently stringent conditions that parents Deutsche Telekom and France Telecom would back away.

While the arguments drag on, Vodafone and O2 will be building up their own arsenals to create a strong pre-emptive strike against the potential enlarged player. O2 has just signed a managed services deal with BT for its fixed and mobile core networks, to improve the quality of its networks and converged services significantly.

Vodafone, which is under pressure from shareholders to improve its market value significantly, did today report an improved outlook for its fiscal year to March 2010. It now expects full year adjusted operating profit of £11.4-11.8bn, up from a November guidance of £11bn-11.8bn. This was because of a "small improvement in underlying trading and the contribution from associates, and lower depreciation and amortisation", the company said. The outlook for free cashflow was increased to £6.5bn-£7bn from £6bn-6.5bn.

For its third quarter to December, Vodafone posted revenues up 10.3% to £11.5bn ($18.2bn) and service revenues up 11% percent to £10.7bn. Organic service revenue was down 1.2%, an improvement of 1.8 percentage points on the previous quarter, on gains across all regions. Organic service revenue fell 3.2% in western Europe and 0.5% in Africa and central Europe, but grew 10.4% in Asia-Pacific and Middle East thanks to the strong Indian market. The mobile operator had 332.985m customers at the end of 2009, based on proportionate ownership of subsidiaries, up from 323.03m at the end of September 2009.

Vodafone exceeded £1bn in quarterly data revenues for the first time, an increase of 17.7% year-on-year on an organic basis. In Europe active data users now exceed 30m, and data makes up 11% of service revenue.

Revenue trends in Germany and the UK improved, but were still down 2.8% and 4.9%, while Spain was stable, down 6.8%. Voice growth was similar to the previous two quarters, with overall price declines continuing at similar double-digit rates. Fixed line revenue increased by 10% percent to £862m, led by Germany, Spain and Italy. Fixed broadband customers reached 5.2m after 267,000 net additions in the quarter.

Pages: 1 | 2