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Share Price Information for Vodafone (VOD)

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Share Price: 75.62
Bid: 75.58
Ask: 75.62
Change: 0.84 (1.12%)
Spread: 0.04 (0.053%)
Open: 74.90
High: 75.90
Low: 74.52
Prev. Close: 74.78
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France Telecom to push further into Africa's high-growth markets

Sun, 13th Jan 2013 17:31

By Paul Sandle LONDON, Jan 13 (Reuters) - France Telecom wants toexpand its presence in fast-growing African mobile markets byentering Benin, Togo, Burkina Faso and Mauritania. Elie Girard, the group's head of strategy and development,said plans for Africa also included seeking to sign managementcontracts with telecom groups in Libya and Algeria. He said no talks on acquisitions were currently underway,but Africa and the Middle East were a priority for growth. "If we manage to enter Benin, Togo, Burkina (Faso) andMauritania, for example, that would be very valuable for us," hetold reporters at a briefing in London. He said the countries'proximity to Orange's existing operations in Mali and Senegalmade them more attractive. The group, which markets its services under the brandOrange, operates in 21 Middle East and African countries. Orange, sponsor of soccer's Africa Cup of Nations in 2013,is the third-largest mobile operator in the region, behind SouthAfrica's MTN and Britain's Vodafone. A presence in Benin would also improve a link between thecompany's network in Niger and the submarine cables that carryInternet traffic between Africa and the world, Girard said. He said France Telecom also wanted to expand into Libya,Algeria and Ethiopia, and would seek contracts to manage otheroperators' telecom networks as a way to get a foot in the door. "There are two operators in Libya today and there is atender for management contracts and we are working hard to getone of those." Algeria as a large, underdeveloped market was alsostrategically interesting, he said, but any progress would beslow. Girard gave no update on whether France Telecom would bidfor Vivendi's stake in Moroccan operator Maroc Telecom . Vivendi hopes to get at least 5.5 billion euros ($7.34billion) for its 53 percent stake in Maroc Telecom in a saleprocess now underway. South Korean telecom firm KT Corp submitted apreliminary offer for the Maroc Telecom stake in mid-December. A move by France Telecom would be complex given that italready owns a 40 percent stake in Morocco's second-biggestoperator Meditel, which it might have to divest. Nor is it clear that the French group could afford thepurchase price given its high debt and falling profits in itsall-important home market, analysts say. Vivendi did not return a request for comment outsidebusiness hours. LOW INCOMES France Telecom has set a target to double its turnover inemerging markets to 7 billion euros by 2015, and has said it ison track to reach that after making acquisitions in Morocco,Tunisia, and Iraq in the past two years. At the end of 2011, it had 14 million customers in Africaand the Middle East, according to its annual report. But France Telecom and other telcos have had difficultyturning customer growth into profits given the low incomes inthe region, which mean customers spend less per year on phonesthan in Europe. Orange earns average revenue per user per year of 36 eurosin Egypt and 80 euros in Senegal, compared with 375 euros inFrance and 163 euros in Spain. Changing that will require a pushto get local middle classes to adopt smartphones and surf theInternet from their mobiles. Also, running communications networks on the continent isexpensive and difficult given patchy electricity coverage andlack of high-capacity cables for Internet traffic in theinterior. As a result, many have reached mobile-tower sharingdeals to reduce costs. Orange, for example, shares towers inIvory Coast and Cameroon. Other infrastructure-sharing agreements would be decided ona country-by-country basis, depending on the location of towersand Orange's market position, he said. Unrest such as the current conflict in Mali and the ArabSpring can also have a big impact on the telecoms business. Despite the challenges, Girard said the group was committedto diversifying via growth in Africa and the Middle East. "Our goal is to rebalance the different parts of the group,"he said. "It doesn't mean we are going to invest a whole lot ofmoney in huge acquisitions just to make the business visible butwe'll continue a very reasonable step-by-step strategy ondevelopment and acquisitions, just as we have in the last 15years."
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