Vodafone targets partnerships for global growth

Following a period during which it considerably scaled back its global portfolio, Vodafone has now outlined how it plans to make increasing use of partnerships to expand into fast-growing markets in Asia and South America in order to support international customers.

According to a Reuters report, the company said it will focus on securing new agreements with local operators, rather than making expensive investments as it has done in the past. This marks a renewed emphasis on partnerships by the UK-based operator, which has now sold non-controlling stakes in operators in France, China and Poland. Vodafone has already secured a deal in with SFR France, in which it used to own a 44 per cent stake: the Register reported that the two operators have now joined forces to deliver enterprise solutions.

Indeed, the provision of enterprise solutions is a major driver of the need to find new partnerships: in order to compete in this market, Vodafone needs to show multinational customers that it is able to support them on an increasingly global basis.

According to Reuters, Vodafone announced a new partnership in French Polynesia and said it expected to agree new deals in further territories in Asia and South America through 2012 and beyond.

Analysts welcomed the move, and see it as a reassurance that Vodafone is less likely to spend large amounts of cash on M&A: "Investors will take comfort that rather than splurging cash...they're seeking to get all the benefits of the brand, all the benefits of roaming, all the benefits of being big without blowing a lot on control premiums," Liberum analyst Mark James told Reuters.

Nevertheless, the Register noted that the MNO is still pouring money into India--despite that market only yielding an average revenue per user of around $2 a month.

According to Bloomberg, Vodafone remains confident that it will be able to increase revenue from the growing take-up of data services in India. The contribution of data to the unit's total revenue will rise to 10 per cent in two years from about 3 per cent at the end of September, Samaresh Parida, the Mumbai-based director of strategy at Vodafone India Ltd., told Bloomberg.

For more:
- see this Reuters article
- see this Register article
- see this Bloomberg article

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