BT (BT.A) is the fixed-line leader in the UK listed telco market. The largest separately listed mobile operator is Vodafone (VOD) – BT owns EE, O2 is part of Spain’s Telefonica, and Three (for now) is part of Hong Kong’s Hutchison. We outlined recently why we are not overly keen on BT, but does the breakneck expansion of mobile data and apps make Vodafone a more interesting investment?
As things stand, Vodafone is the UK’s number three mobile operator but, assuming it is fully approved by the Competition and Markets Authority (CMA), its ‘merger of equals’ with Three UK will propel the company to the number one spot in the UK with a combined 27mn customers. Vodafone is number two in German mobile (behind Deutsche Telekom), a major player in the fast-expanding African market, and has operations in the hyper-inflationary markets of Turkey and Egypt. The Spanish and Italian divisions are in the process of being sold, with £6bn of the €15bn (£13bn) sale proceeds to be returned to shareholders via an additional buyback.
In addition to mobile services, Vodafone is a fixed-line broadband provider (actually a reseller rather than full operator) in the UK and Germany (in Germany fixed-line revenues are actually higher than mobile) and also derives revenues from selling parts of its spectrums to mobile virtual network operators (MVNOs) including VOXI, Asda Mobile, Lebara and Talkmobile. It also offers a suite of business overlay tools such as cloud computing and data security.