Vodafone Raises Profit Outlook And Sells Off Softbank Stake


Back to basics for Vodafone, as the carrier continues apace with its sell-off of non-controlled assets. Today it has agreed to sell off a $5 billion stake in Softbank back to the Japanese operator, as it sharpens its focus on operators in Europe, Africa and India where it has majority shareholdings. In today’s interim results and strategy update, Vodafone (NYSE: VOD) also said that better-than-expected sales means it will raise its full-year profit guidance for the year to the end of March to £11.8 billion to £12.2 billion ($19 billion-$19.7 billion), compared to a previous estimate of £11.2 billion to £12 billion.

Vodafone will use the proceeds of the sale of its Softbank stake – originally received as part of its sale of Vodafone Japan to Softbank in 2006 – to pay down some of its debt. Other recent sales of minority assets have included a 3.2 percent stake in China Mobile, offloaded in September for $5 billion (before taxes).

That month, the operator had regrouped its minority shareholdings into one division: others that may also get offloaded include a 24.4 stake in Polkomtel of Poland and 44 percent stake French operator SFR (where Vivendi currently has a 55 percent share). However, it’s worth noting that the French operation is one of Vodafone’s biggest in Europe and Vodafone has been tenacious in the past in holding on to it and trying to increase its shareholding over Vivendi (EPA: VIV). Vodafone said that the sale of the China Mobile share contributed to its highest ever earnings per share, of 14.31 pence ($0.23).

Vodafone for now will continue to hold on to its 45 percent shareholding in Verizon Wireless, although the operator has not paid a divided since 2006.

Mobile data services. In a quarter that has seen the departure of company’s head of Internet services Pieter Knook, and a transition of its ambitious 360 social media product from a costly own-brand device strategy, to a more modest software service, the company continues with its focus on trying to make mobile data pay off greater returns.

The company is continuing to roll out tiered pricing plans based on data usage, a strategy it started earlier this year in selected markets. For the first half of the year, Vodafone reported £2.4 billion ($3.9 billion) in data revenue versus £1.9 billion ($3 billion) a year ago. Messaging revenue is also growing, but at a much smaller pace, £2.5 billion ($4 billion) compared to £2.3 billion ($3.7 billion) the year before.

Total revenues for the first half of the year were £22.6 billion ($36.4 billion), compared to £21.8 billion ($35 billion) a year ago.

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