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CEO Nick Read said banning Huawei from providing 5G infrastructure in Europe would hamper competition in the supply chain. China's Huawei, Finland's Nokia and Sweden's Ericsson are the three biggest providers of telecommunications equipment in the world, accounting for more than half of revenues in the market, according to research firm Dell'Oro Group.
"If we concentrate it down to two players I think that's an unhealthy position not just for us as an industry but also for national infrastructure in the country," Read said.
Read added that it would be "very very expensive" for operators and consumers if companies were forced to swap their Huawei equipment in favor of competitors', adding it would delay Europe's 5G rollout by "probably two years."
"It structurally disadvantages Europe," he said "Of course the U.S. don't have that problem because they don't put Huawei equipment in."
Huawei's rotating chairman Guo Ping claimed the company is 12 months ahead of its competitors when it comes to 5G technology.
The Vodafone Group is the world's second-largest mobile operator by subscribers, with around 700 million globally
"But nobody seems to mention the $45 Billion of debt"
Where did you get that figure from and when was it dated? Why in $ not £? (although Euros might be next.)
From the last full year results, Mar 18 it was £31,169M including cash. I haven't kept a ready reckoner since and there is a deal to fund soon too so they have highlighted a rise, should the deal go ahead.
As for "unsound" the market seem to accept this sort of debt with cash generating, stable companies. Ideally no debt would be my prefered amount but its not necessary most efficient as per previous posts.
I suppose it comes down to affordability, its fine whilst you can afford it but a worry when you become less stable and cash generative. This normally occurs when the plan back fires and "headwinds" increase and debt cost rises etc into a perfect storm. Lets hope they only come one at a time, if and when they do
As per an earlier post, here is the link for EU QE maturing securities which from January are being reinvested in the secondary market of EU countries. There has been 4 years of QE to the end of 2018 so presumably there can be 4 years of reinvestment to the end of 2022 ie securities with accommodative/ low rates. The EU QE monies at the end of 2018 were c€2,800Bn according to the table below. Globally there are currently c$10 trillion negative yield bonds.
Agree. One encouraging factor is that Read was promoted to CEO from inside, so knows the business as well as anyone & better than most. So his confidence about keeping the divi carries weight, assuming his synergy targets (to save $10 billion over 2 years) & other moves go to plan. As we know, that's never a given.
However, even if he was forced to trim rather than slash dividends, to reduce debt faster, that too can go down well with markets. I've known some SPs to actually rise soon after a divi-cut as market can see debt reduction as a more positive step than paying a very high yield.
But anyone buying in at these levels should do well holding over time. Alas, my cheapest buy is 175+. Though I've traded it successfully before, this time I got badly caught out by the idea that VOD would remain a "defensive stock" as over previous years.
I've not added more with dividends as I'm building a bigger cash position due to certain macro uncertainties affecting UK's economy & that those may well continue for much longer. - GL. Catch up later.
But nobody seems to mention the $45 Billion of debt that Vodafone has which is more than 50% of the current enterprise value of the whole business. Surely this financial metric is normally considered "unsound" by markets?
Indeed. The BOD don't seem concerned about shareholder value - rather to keep building up their assets instead. Even if the dividend is halved it's still a good investment as long as one buy now and the sp doesn't halve too.
I agree it's priced in to some degree. Despite indicators from CEO that divi will be sustained, market remains unconvinced looked at longer-term until falling revenues are reversed & high debt is addressed. Understandable concerns. Level of debt remains a concern. Especially as intense competition across the sector is bringing down customer prices & key markets face an economic downturn.
That said, I'm not selling at loss at these prices. I shall hold on. I very rarely take hits. Hence why I'm well in profit with my real share account since starting 2009. But if things deteriorate with VOD's next results, I shall review accordingly. I'm an optimist by nature, but not blindly so. - GL.
Dividend cut priced in do you think? That is, if it happens, will sp not move? Answering my own question, I can well imagine a drop to 120/130s if and when a dividend cut is announced. If the dividend is sustained then this may be the best investment in the FTSE 100. (Surpised VOD hasn't been relegated.)
It's more so stuck in a tight range than an uptrend. Since near 10 year closing lows of 135.08 seen 29th January, SP hasn't finished higher than 142+. For now, it seems a small blessing that it's not back down as uncertainty continues re a few key issues, including Liberty Deal.
As for broker targets: unless there's broad consensus, IMO, they hold little weight. Brokers notes had far more authority before easy online access to financial info for all. Now they're just one small ingredient. I tend to ignore them. For eg. VOD has targets from 125 to 300. Of little practical use to anyone. - GL.
VOD will end up buying / merging with TIM, Elliot is pulling the strings........the problem is the socio-commy guys at the European Commission. Our dream scenario would be for Buffett to splash his stash on VOD.