Vodafone releases key indicators – doubts grow

Market on tenterhooks

  • alert
  • submit to reddit

Designing a Defense for Mobile Applications

ComputerWire: IT Industry Intelligence

Vodafone Plc will release its key performance indicators today as belief in the growth prospects of the world's largest mobile operator is crumbling and its share price is poised to crash through the psychologically important 100 pence barrier.

In common with other European operators, it is expected to report a slowdown in the growth of subscribers, but nervousness about the company has increased with reports that it lost subscribers in Germany, Europe's largest market, after rebranding the D2 operations that it acquired with its takeover in 2000 of Mannesmann AG with its own name.

There had been general support in financial circles for Vodafone's ambitions, but the minority who questioned the company's prospects received enormous support when Japanese bank Nomura did a huge U-turn last week and, from setting a target price of 160 pence for the stock and a "buy" recommendation, now say that the shares are worth just 77 pence and should therefore be sold.

Nomura said that over the next six months, concerns on subscriber growth and ARPU levels are unlikely to be alleviated by today's key performance indicators or the full year's figures on May 28. It said that as the 2G mobile sector matures, the premium commanded by Vodafone and many of its mobile peers over the integrated telco sector looks increasingly unwarranted.

After three-quarters of static ARPU figures from Vodafone, it says that there are few additional services or drivers on the immediate horizon that are likely to convince consumers to spend more on their phones. Spending on mobile telephony has been around 2% of GDP per capita for some time, and although new services such as MMS are coming, Nomura said that consumers have been used to getting better value for money. Convincing them to spend more of their disposable income while the competitive landscape gets tougher, and regulatory intervention mounts, may prove an insurmountable challenge for mobile operators.

Nomura estimates that Vodafone will only increase subscribers this year by 10% and it said that its subscriber base will start declining beyond 2005 due to the effects of increasing competition.

Adding to the gloom surrounding the company, its Japanese unit J-Phone Co Ltd has put back its 3G launch date for this second time, this time to December from June. It said it needed the time to conform with international 3G specifications and would start a trial service at the end of June. This leaves J-Phone trailing in the 3G race as rivals NTT DoCoMo Inc and KDDI Corp have already launched services.

© ComputerWire. All rights reserved.

HP ProLiant Gen8: Integrated lifecycle automation

More from The Register

next story
Scotland's BIG question: Will independence cost me my broadband?
They can take our lives, but they'll never take our SPECTRUM
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
Bring back error correction, say Danish 'net boffins
We don't need no steenkin' TCP/IP retransmission and the congestion it causes
NBN Co adds apartments to FTTP rollout
Commercial trial locations to go live in September
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
Telstra to KILL 2G network by end of 2016
GSM now stands for Grave-Seeking-Mobile network
Seeking LTE expert to insert small cells into BT customers' places
Is this the first step to a FON-a-like 4G network?
What FTC lawsuit? T-Mobile US touts 10GB, $100 family-of-4 plan
Folks 'could use that money for more important things' says CEO Legere
prev story


Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.