Vodacom to profit from Vodafone megadeal
Vodafone‘s plan to boost investment in broadband and superfast mobile networks after its $130 billion megadeal with Verizon will see emerging markets – including South Africa – benfit from the windfall.
The mobile giant is executing its Vodafone 2015 strategy to address these opportunities, and now plans to make significant additional organic investments to further enhance its competitive positioning, leading data networks and compelling branded customer experience over the next few years, it said.
Under its “Project Spring” investment scheme, Vodafone plans to raise its capital expenditures by 6 billion pounds (R96 billion) over three financial years to improve its networks across Europe and in emerging markets – including India, South Africa (Vodacom) and Turkey.
Key areas for investment include:
- accelerated 4G (LTE) network build, covering 90% of its five main European markets by 2017, supported by a single RAN and high capacity backhaul;
- deeper 3G coverage and capacity in mature markets;
- unified communications: extended fibre roll-out, as well as widened NGN and VDSL resale reach;
- upgraded distribution presence, both online and retail;
- additional 3G voice and data coverage in emerging markets;
- enhanced enterprise service portfolio, including IP-VPN, cloud, hosting and M2M;
- faster deployment of mobile payment services; and
- development of new and standardised sustems to improve customer experience and simplify Vodafon’e operations.
Vodafone Project Spring (click to enlarge)
Details regarding how Vodacom will specifically benefit from Project Spring are currently unknown, but the operator said it will provide more detail on Project Spring in its interim results presentation in November 2013.
Vodacom CEO, Shameel Joosub told BusinessTech: “This is definitely a positive development for Vodacom, and will further enhance our competitive positioning.”
Big spend
Of the $130 billion Vodafone will receive out of the Verizon sale, $84 billion will be returned to shareholders.
According to Reuters, Vodafone spent 6.3 billion pounds on network investment in its last fiscal year, so the three-year uptick does represent a significant new effort for the group.
Quoting Bernstein Research, Reuters said that Vodafone’s capital expenditure-to-sales ratio, the industry metric used to compare investment levels, has slightly trailed the average of European telecom operators since 2007.
With Project Spring, Vodafone’s network investments will be higher than those of its European rivals.
More on Vodafone
Vodafone: how do we spend $130 billion?
Inside the $130 billion Vodafone, Verizon deal
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