Vodafone's new CEO to cut costs, review tower assets
Vodafone's new chief executive Nick Read said he would reduce operating costs
by â¬1.2 billion by 2021 and review its tower assets to drive higher returns
at the world's second largest mobile operator.
Replacing Vittorio Colao at the top of the British company after the Italian
ran the group for 10 years, Read said he would also freeze the dividend until
the British company has reduced its debt pile.
"My new strategic priorities focus on radically simplifying our operating model
and generating better returns from our infrastructure assets," Read said today.
The initial market reaction was positive, with Vodafone shares trading 7%
higher shortly after the market opened.
The shares had fallen 39% since the beginning of the year as investors fret
about the cost of acquiring Liberty Global's cable assets in Germany, the
outlay on new spectrum for 5G services and tougher conditions in some European
markets.
He also said he would reduce Vodafone's costs for the third year in a row.
As part of a move to drive better returns from investments and to share capital
assets where possible, it would create a "virtual tower" company to manage the
58,000 towers it controls across Europe, with a dedicated management team.
The group is also conducting due diligence on how best to own all of its
towers, including those held in joint ventures.
Analysts have suggested the group could partner with a tower group operator to
bring extra cash into the business.
Any change in the ownership of its towers would mark the latest reinvention at
Vodafone which is adapting to rampant consumer demand for mobile and fixed
broadband services at a time of high competition in the industry.
Colao announced his departure in May a week after Vodafone clinched a long
discussed deal to pay $21.8 billion to buy Liberty Global's assets in Germany
and eastern Europe.
That should allow it to take the fight to rivals with a broader range of
superfast cable TV, broadband and mobile services. The group today showed it
was operating generally in line with forecasts.
It reported group service revenue of â¬19.7 billion and adjusted earnings of
â¬7.08 billion, up 2.9% on an organic basis for the six months to end of
September, broadly in line with market forecasts.
Vodafone also narrowed its growth target for organic adjusted core earnings to
3% from a previous range of 1-5% and said it now expected free cash flow before
spectrum costs to be around â¬5.4 billion, above the previous target of â¬5.2
billion.
It had an operating loss of â¬2.1 billion, largely driven by impairments of
â¬3.5 billion in Spain, Romania and the Vodafone Idea business.
Vodafone Ireland's quarterly performance in line with expectations
Vodafone Ireland said its underlying service revenue grew in the second quarter
grew by 3.3% to â¬241.2m, while its mobile customer base grew by over 8,000
during the quarter.
The company said its mobile data usage increased by 44.1% year on year to over
21.2 petabytes of mobile data for the very first time.
Vodafone said that SIRO - its joint venture with the ESB - has now passed
200,000 premises, as it continues to build out its network across towns and
cities around the country.
Meanwhile, Vodafone and SIRO's national Gigabit Hub Initiative connected its
eighth hub with a 1 gigabit broadband connection during the quarter. A further
four hubs have been officially approved for connection.
Anne O'Leary, CEO of Vodafone Ireland, said the company is performing very much
in line with expectations, with continued growth across a number of key areas -
particularly mobile.
"We remain focused on our strategic objectives of supporting the creation of a
Gigabit Society in Ireland through the roll out of rural broadband via SIRO,"
she added.
She noted that Vodafone and SIRO's Gigabit Hub Initiative, which provides free
1 gigabit broadband connection to qualifying business hubs across Ireland for
two years, connected its eighth hub during the three month period.
"The latest hub saw Irish Manufacturing Research (IMR), the Enterprise Ireland
and IDA Ireland-backed technology centre in Mullingar, receive this vital
connection. These types of initiatives are critical if we are to support the
growth and long-term success of our indigenous companies and ensure that our
local communities thrive," Ms O'Leary said.
Eir announces â¬150m mobile network upgrade
<https://www.rte.ie/author/666389-will-goodbody/> By Will Goodbody
Science & Technology Correspondent
Telecoms company Eir has announced that it is to invest â¬150m in upgrading
its mobile network.
The investment will result in 4G voice and data coverage extended to more than
99% of the land mass of the country.
The company claims the overhaul will see its entire mobile network transformed
over two years.
Hundreds of additional mobile base stations will be added and existing sites
without 4G capacity will be upgraded to it.
Eir claims this network improvement will result in it having the most expansive
4G mobile network in the world.
The investment will also see the roll out of fifth generation or 5G services in
2019, leading to much higher data speeds in the main cities here.
Eir chief executive Carolan Lennon said the plan represents a significant
investment in its mobile network.
The mobile project is part of a wider â¬1 billion network capital investment
programme by Eir over the next five years.
Radio access network equipment will be supplied by Huawei, while Ericsson will
continue as strategic partner for the core network.
The news will come as a boost to Eir customers living in rural areas that are
not served by high speed broadband.
It comes as the Government awaits the outcome of a review by the independent
auditor to the troubled National Broadband Plan.
Peter Smyth is examining whether the project has been undermined by contacts
between former Minister for Communications, Denis Naughten, and businessman
David McCourt, who is leading the last remaining consortium bidding for the
contract for the plan.
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