Member Info for Longish

Hi Jack,
I am not sure gross revenue is as important as service revenue (which NR reports). Over the many years of price caps on mobile termintion rates, these revenues have disappeared taking many €Bns off the top line but not much off the contribution because inpayments from other operators are matched by outpayments to those operators and at at a total market level =0 ie in = out. Because these revenues are no longer relevant, I think service revenues are more important and they have been steady/ growing. The marginal cost of debt (last year c€0.3Bn interest) is covered by the marginal contribution from earnings (€0.6Bn EBITDA). The incremental cost of spectrum is recovered over 8 to 10 years of EBITDA growth and debt is required to cover that extended period.

I dont understand why the SP has been dragged down by debt concern when Vod is the main player in town. Could be its current dependency on europe and general concern for the european economies. Generally there is small, slowing GDP growth across europe which Vod is tracking...

If Vod is not a growth stock (5G etc) then the SP is a utility with a steady div with marginal capital costs recovered out of 8 to 10 years EBITDA. Div 14p @ 6% required rate of return =£2.33 SP (14/.06).

Double bottom, or in the case of Vod, saggy bottom

Nice (old) article on market makers.....'The most effective way is long-term investors slowly accumulating and holding thus drawing the MMs out of its defenses making them as naked as their short position. This is war so this slow accumulation and holding for the long term easily achieves the desired effect to force MMs to cover and knock off the tactics or bury themselves deeper'..
https://www.reddit.com/r/weedstocks/comments/1xydch/market_maker_speaks_out_ways_of_a_market_maker/

I think the employee share scheme has a 123p option price from an earlier post...generally telcos are down, not just Vod.

Wont be long now before pension fund freedoms are perceived as a policy blunder..

I continue to cost average down and happy to take the div as return on my investment
Vods economic/capital reinvestment cycle runs over 8 - 10years so there are inevitably going to be fluctuations.
1G early 1990s, 2G late 1990s, 3G early 2000's, 4G/ LTE evolution late 2000's early 2010s. 5G late 2010's early 2020's..

Its worth noting some IOT applications will work well on 2G, narrow band iot etc so its not simply a case of next gen tech drives industrial internet/ iot etc. Sweating the assets like NR has laid out underpinned by strategic commercial initiatives and the cash will keep rolling to pay the div.

SP is due to weak government. Vod will soar once weak politicians sorted

NR holding the div flat for june reporting. EBITDA increased €0.6Bn yoy. If that continues, isnt that enough while concentrates on other financial, commercial and operational initiatives?

Most investors, including recent investors are carrying paper losses at todays price. Its hard to see a world without mobile phone subscribers, monthly direct debits etc. Regulators arent going to relax rules who can sustainably provide services to a population. Del Boy doesnt pay income tax or vat, no money back no guarentee...

Topped up this morning, and BT..

Makes sense that automotive mobility is not restricted to proximity to wifi. Vod has a great opportunity here.

Well NR said he would drive a more commercial Vod...and lower cost is right up there. Vod historically has done the heavy lifting to develop markets and encourage competition at a hi cost to Vod

A fact based review with government and security agencies will identify the security issues. Can argue there is no security issue using Huawei kit in the radio access network and part/ all of the core network. Secure Gov networks would be tested anyway etc

Topped up again today for the divs and 'locked in' consumer cashflows going forward

'But nobody seems to mention the $45 Billion of debt'

IMO Vods immediate fortunes are tied to Europe and Mr Draghi who will remain accommodative on interest rates for as long as is necessary..

Vodafones optimal debt equity mix and its weighted average cost of capital to maximise its share price is 'the point at which the marginal benefit of debt equals the marginal cost'.

Even if interest rates rise, the interest cost is tax deductible and it remains more efficient to use a debt/equity mix to fund investment at lowest average cost. The lower the cost, the higher the SP.
https://www.investopedia.com/terms/o/optimal-capital-structure.asp

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.

Also, the FED may cut rates from here. In any event, I would be happy with 6% yield if the SP increased back to 233p.
https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html

Hi Iva, Vod has only dropped about 6 or 7 places in the FTSE 100. Currently about 16th

SP may slowly creep up from here as the cashflow is reported. 'EU' has to be happy with this particular deal and future prospects?

NR timing is good. May see some asset impairment at year end -already baked in the SP ie net assets were c€67Bn last ye

Network (and mast) share.

Interesting how the SP will move on this news as the capital reinvestment and network operation cost is reduced (shared) 50%

http://www.lse.co.uk/share-regulatory-news.asp?shareprice=VOD&ArticleCode=7x32w72r&ArticleHeadline=VODAFONE_ITALY__TIM_INTENTION_TO_SHARE_NETWORKS

LoL the intermediaries with Gov and market economy planners get 20%. We speculate and 2 years jail time if we dont comply with the relevant laws. LoL

Open data networks and subscription billing are a tight rope walk for a licensed operator like Vod. Underlying, Vod sells huge capacity to the competition at wholesale prices whilst risking fines if its compliance with its own consumer billing and metering legislation is wrong by one 'unit'..

Agreeing 5G standards in the global value chain will imo drive incremental revenue on Vods networks. Roughly 70 or 80% of a countries population live in 40% of the geography. The regulator demands 90% geographic coverage, maybe more going forward. Vods reach and quality of service increases with 5G interoperability with fixed access. Vod takes market share in each of its 5G markets.
https://news.sky.com/story/samsung-unveils-foldable-phone-and-5g-version-of-galaxy-11643182

Quarterly or monthly divs please!!

Investor chronicle F-scored 38 companies which I put into a watchlist last year. Dropped 12% until the last 3 months and recovering to 3% down today. The market has reverted to financial measures, I guess because of the higher uncertainty/ volatility.

Under the FScore, Vods SP appears held back by over weighting fixed (network) assets unique to a licensed regulated telco operator. 5G, Liberty, regulatory clearances etc will lift the SP because the market will have to accept you need the network assets to provide the service