Analysts: Vodafone a top bet in the mobile market
European telecom operators have financially suffered due to competition concerns and sluggish growth, but Vodafone has the potential to outperform the market and is being rated by Deutsche Bank as one the telecom sector's top bets.
The bank believes that the UK-based operator has one of the sector's best proportionate GDP and revenue growth rates due to its exposure to markets outside of Europe and diversification within the region, according to Proactive Investor.
Deutsche Bank adds that economic recovery in Europe would kick-start any uplift, and believes that the secular growth story of mobile data remains attractive and should be boosted as smartphone prices fall and LTE networks are launched.
Overall, Vodafone is an attractive combination of growth, valuation, secular exposure and will benefit from an economic recovery, says Deutsche Bank which has a £2.25 price target for the stock.
The bullish take on Vodafone's outlook comes shortly after analysts at Bernstein downgraded Vodafone, having kept the stock on its "buy" list for the last three-and-a-half years. Bernstein said the operator is failing to make headway with plans to increase network sharing and remove the hefty costs associated with handset subsidies.
Separately, Vodafone announced an M2M partnership with IBM to combine mobile communications and cloud computing for the remote management of smart home appliances. The collaboration will see Vodafone's global M2M platform running on IBM's new SmartCloud service delivery platform, according to Smartmeters.
The firms believe that this joint initiative will enable consumers to use their smartphone to manage a variety of remote activities including viewing their home's power usage, controlling security, heating and lighting systems, and activating home appliances.
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