Vodafone mulls spinning off tower unit


Vodafone Group CEO Nick Read has laid out plans to merge its infrastructure subsidiary, Vantage Towers with another industry player, as the company pushes on with attempts to refocus various parts of its business.

During the company’s fiscal first half results call (for the six months to end-September), the CEO said Vodafone could also consider raising cash from Vantage Towers by selling-down its stake, but emphasized it rather prefers a merger.

Nick Read pointed to a number of suitable partners including Orange’s Totem, noting that a collaboration with a player in its current markets would create synergies while one based elsewhere would help expand Vantage Tower’s reach.

Outside of its infrastructure business, Read noted Vodafone was focused on building on its position in Germany through increased fixed-mobile cross-selling, acceleration of operational transformation at its troubled Spanish business, and positioning Vodafone Business to take advantage of a European Union Covid-19 (coronavirus) recovery fund.

The CEO said its Spanish unit “stabilized” following a restructure of its retail footprint done in response an increase in competition and associated fall in consumer prices.

In an attempt to revive the division the company is working with Spain’s authorities on various changes to spectrum licences alongside lower fees and tax changes.

As hinted by Read’s comments in an interview with UK newspaper The Sunday Times, Vodafone is also assessing in-market consolidation in various European countries, with Spain a prime candidate.

Vodafone highlighted improved commercial performance in Europe and Africa in fiscal H1, citing gains in service revenue, a recovery in handset sales and favourable foreign exchange rates.

Net profit fell to €1.3 billion from €1.5 billion, though H1 2020 included a pre-tax gain of €1 billion from a merger of Vodafone Hutchison Australia into TPG Telecom.

Revenue increased 5 per cent to €22.5 billion, driven by service boosts in various operations in Europe and Africa.

In Africa, the company’s Vodacom Group business booked a 21 per cent revenue increase to €2.9 billion, largely due to favourable exchange rate movements.

It also noted a “significant growth” in use and earnings from its various mobile money services, though this was partly offset by the introduction of a government levy on transactions in Tanzania.


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