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whether previous L/T support at 131+ now becomes a resistance level
I will be happy if VOD recover and sit at 131 until Q2 and a decision to clear Liberty.
I think NR reports Q1 (period ending 30 June) on 25 July. As this is 2 days after the potential Liberty clearance, the ink will still be wet on the slideware..
According this technical source which has turned less bearish recently..
Thanks again. I can see the logic of your comment. Your VG points taken on board. You may well be right & one hopes so. For me at least, the next couple of weeks will be key. Ill be looking at whether previous L/T support at 131+ now becomes a resistance level.
Pity that the EU keep delaying their decision on the Liberty Deal, now pushed back until 23rd July. Weve had a few delays on this now & it suggests that the outcome is by no means certain. – Regards.Longish
I sound like a remainer who now supports Brexit. but I too worry about short term profitability and the share price. The trend for income stocks is more widely to rebase and toward lower yields. Hopefully much is priced into Vod now. If I stay in the market at all, imo Vod should be less negative than a selection of other large cap income stocks still to bite the bullet or theoretically close to or in the process of correction. My worry in rebalancing is I catch another stock correction. Thats not to say VOD cant go down from here but there is seemingly more support in terms of market narrative… and the regulatory angle provides an economic moat longer term as society depends on fixed mobile service. I bought all the way down so can sell all the way up if I want to. I wont buy anymore.
The Liberty delay is not helpful in the short term. Also we dont know how much VOD tipped the kitchen sink in the last Qtr to meet FY guidance. We certainly are not out of the woods and its Q2 before Liberty reports into the narrative and metrics..
I think Pokerchips posted possible 130 next week which I guess leads up to 3.6 pr 3.7p div 5 June. Will be interesting to see if the SP recovers after ex div given future (rebased) divs have been assured by the BoD!?uddinkas
Furthermore, the 5G will bring much needed frenzy to bring telco shares back in fashion now that those who didnt used to upgrade their handsets every year or two will need to upgrade to the 5G compatible phones.jackdawsson
Thanks! VG points & as bullish as Id expect from someone who seems committed to holding this for a few years. Not knocking it as youll know whats best for you over longer time-frame.
For me, I respectfully disagree on a certain point. I do worry about profitability. Not least over the foreseeable future. As stated to Dan a few days ago, I worry whether VOD can turnaround falling revenues & earnings by time of their next update, whilst debt expected to increase. I note, short position on VOD are still high. I worry about how low those shorting this think it may go? My view has somewhat altered since 131+ support went on 14th May.
On the plus side, youll have heard the last of my rambling for a while if VODs SP isnt above 131 by 5th June, bar for transparencys sake me posting my crystallised losses. But to each their own as always. – All the best!Longish
I guess its the bell curve where the replacement cycle begins and ends over different overlaping periods of time for each generation of technology relative to the optimal finacial contribution to from the portfolio of assets and commercial service offerings. How a company executes strategy and operates determines profitability and competitive position relative to the other licensed market operators through whom the customer can only access the service. VOD management strategy and sentiment toward its financial reenginerring is starting to thaw in this regard imo.
The adoption rate for 5G, as for previous generations, is not inconsisent with the quoted life of spectrum. VOD management tell us the lifecycle is 7 to 9 years. Some generations have long tails on the right of the bell curve eg messaging and iot applications can be carried out efficiently over 2G.
I dont worry about profitability if the consumer 5G adoption rate is 25% by 2023, rather, I worry that VOD meets its commitments to replatform the business in the financial timeframes that drive the SP over the period to 2023; that they manage the costs of transformation, balance the introduction of 5G in to economic areas/ segments that will adopt the products with a fair financial return whilst sweating the previous generation products in economic areas/ segments where there is an optimal contribution relative to the whole portfolio and/or the enterprise value of the business (hub). In the same way new entrants compete on price and disrupt models, VOD is offering early 5G adopters comparable top end 4G smartphone prices (against a a Huawei disprupted supply chain)..
Macro events now risking a tech cold war. In the weekend FT, only 30-35% of Huawei chips are produced in house, whereas there is a 30% potential hit to Apple earnings per share if it lost access to China. VOD provides network access and charges for (5G) service independent of the handset manufacturer. With the introduction of IFRS15, handset revenues are recognised over the life of a customers contract. If that is 2 years, then the potential 5G replacement is 2 years away. In reality, contracts expire every month so the choice of a cheap or expensive smarphone is available now to the consumer…Longish
Australias competition regulator earlier this month said it would oppose the A$7.7B deal as it would substantially reduce competition, since it would preclude TPG becoming a fourth player in wireless.
The number 4 seems to be popular with competition regulators in many markets. While 3 have operated in markets like France.
1.) Wholesale regulation before retail regulation: the best protection of consumers is the freedom to switch between providers
2.) Ensure that market players decisions are based on economic merits, not on artificial conditions created by regulation
3.) Allow for maverick behaviour from new entrants: there is no abuse of non-dominance
In the UK 3G market, 3 mobile was the maverick and the incumbent licensed owners of spectrum were Vod, O2, Orange, T-Mobile.
That became 3, Vod, O2, EE and then through competition and lobbying, 3 shared network with EE (MBNL) while Vod shared with O2 evolving to 4G LTE (+) we have today. EE now converging in BT…
The regulatory process starts with a consultation leading to the market definition and an assessment of significant market power eg market power over a customer (citizen). A customer (citizen) takes service from more than 100 regulated markets within the UK telecoms market definition so its a complex process with final determinations taking 4 or 5 years to be reached through the courts, competition advisory tribunal et al . Along the road, remedies to relevant parties are made eg disposal of business to rebalance market power.
Also of interest, following Brexit, the UK will have a free hand how it regulates the UK market (before Brexit OFCOM was an EU institution and governed by pan EU regulations)TLWilliams.
1. Australias TPG Telecom has filed proceedings with the countrys federal court looking for orders that a proposed merger with Vodafone Hutchison Australia wont lessen competition. Australias competition regulator earlier this month said it would oppose the A$7.7B deal as it would substantially reduce competition, since it would preclude TPG becoming a fourth player in wireless.
2. The European Commission took a 10-day extension to its review of Vodafones acquisition of assets from Liberty Global. That moves the new deadline to July 23. (This was posted earlier, as was the HSBC upgrade to Buy, which was also included with the update).Longish
Standard Chartered forecasts the top 3 countries in the world by purchasing power parity GDP in 2030
Thats interesting. In the time frame Vodafone is currently positioned to benefit from Vodafone Idea in India and Vodafone US. The Huawei debacle influencethe china relationship, +ve or -ve
Over the same timeframe there will large population migration from Rural to Urban areas bringing more users into fixed mobile converged catchment on all continents except Africa. There will be an overall increase in population living in rural African areas by 2030. I guess the current initiatives with Vodacom, Safaricom and M-Pesa capitalise on this, particularly the benefit of mobile over fixed in rural areas. Ethical investment too as it supports economic growth in some extreme poverty areas.Pokerchips
Indeed, especially when you look at BT …. and a Friday before a bank holiday weekend …..
By the end of 2018, 5.1 billion people around the world subscribed to mobile services, accounting for 67% of the global population. 5G is now upon us, bringing with it the promise of a host of exciting new services and new telco business opportunities: IoT, media convergence, AI and new milestones in connected devices. Over the coming years, these new opportunities have the potential to provide an uplift to mobile operator revenue, with an expected annual average growth rate of 1.4% between 2018 and 2025.
Bloody hell how many times are they going to extend this deadline
HSBC analysts, in a note to clients on Friday, noted that the fall in Vodafones share price since the dividend cut has brought the yield on the stock down to 6.4% and presented an attractive entry point for new investors.
Keeping its share price target at 160p – implying a 4.9% yield in-line with sector peers – and even though the analysts expect Vodafone to trade at a discount, they see reasons for this gap to the sector average to narrow.
They added that the dividend reset and the recent New Zealand disposal indicate a welcome proactive approach by management of the balance sheet, while other key catalysts should be improving revenue trends and the immediate benefits to cash flow from the Liberty deal.
Following recent comments from Vodafones management, HSBC believes the tone of the companys commentary should get progressively brighter, starting with the first-quarter statement in July and likely approval of the Unitymedia acquisition.
Making it clear that material risks remain as Vodafones markets stay highly competitive and performance must improve and missteps be eliminated in a sector that remains resolutely out of favour, the analysts said the near 50% fall in the shares since the start of last year and removal of the dividend-related overhang have now created a sufficiently attractive opportunity to lift their rating.TLWilliams.
The following facts from Vodafones recent announcement suggest that the heavy investment in 5G technology might augment its current multiple revenue streams – if it offers a high quality service with a competitive pricing structure. I havent researched the equivalent facilities offered by its competitors, but the early launch should put the company alongside its rivals, who are also targeting an early launch, in order to provide some competitive advantage. Hopefully all this bodes well for an interesting summer ahead?
1. Vodafone has announced its launch 5G phones and pricing alongside a partnership with the Hatch game streaming service to showcase 5Gs low latency.
2. Vodafone is still talking about 5G in terms of a 4x speed increase, even though some users will get faster speeds in certain areas.
3. The launch handsets are the Galaxy S10 5G – available now to pre-order – and the Xiaomi Mi MIX 3 5G which is available online and in store immediately.
4. Vodafone was originally supposed to range the Huawei Mate 20 X 5G but, like EE, it has decided not to stock the handset for now. And it seems it postponed its 5G launch event because of the situation. Vodafone UKs consumer director said : Huawei are a great partner of ours, but given recent news we felt it was best to put the launch of that device on hold.
5. The Xiaomi is available on pay monthly plans starting at 50 per month, while the Samsung plans start at 58 – Vodafone says the S10 5Gs pricing is promotional – in other words, it will go up after the pre-order period. These plans are for 5GB of data and require an up front payment of 99 and 149 respectively. 15GB of data will cost 4 extra per month.
6. Vodafones 5G network will be live on 3 July in Birmingham, Bristol, Cardiff, Glasgow, Manchester, Liverpool and London and will be in a total of 19 towns and cities by the end of 2019.
7. Hatch will be free for three months on 5G plans after which it will cost 6.99 per month.
8. 5G customers will be able to benefit from the same Red Entertainment offering as on 4G.Lunchalot
US GDP is c$20.5 trillion and growing at c.2.5% a year
China GDP is c$12.5 trillion and growing at c.6.5% a year
Standard Chartered forecasts the top 3 countries in the world by purchasing power parity GDP in 2030
Hope Vod lawyers are not putting on their comfortable slippers. A nice crisis to take the pressure off performance. But in the end, a relationship with the US is important. Maybe Vod can sell the UK to a US interest. Wouldnt want Huawei being in the way then.scoobyrex
Looks like the event was heavily centered around 5G based home broadband using a Huawei device. so they event got canceled and they went ahead announcing a couple of non-huawei 5G handsets.
Next year 8k video will start to be around …especially in the Olympics and 8K will start the re-purchase cycle for even better video and picture quality experience ….8k and 5G will collectively boost sales next year and beyond
I thought i didnt need 4k TV until I got one and it will be the same with 5G….you wont think you need it.
..until you get it and experience the difference ..
Clearly it will be, say Christmas 2020 when the prices are better and boom the sales go sky highjackdawsson
Many people will share your view. All the research done so far (other links say as much) suggest that global 5G ownership will reach over 25% only by 2023. Over 70% of smartphones will still be 4G by 2023 & some even 3G. This is the crux. Huge investment by companies like VOD now, increased debt, but optimum profit rewards unlikely for a number of years.
This tech will be embraced more so by certain businesses, but not for a long time by general consumers. GL. Catch up later.
I dont disagree with your choice or views. In an earlier post I said evolution, not revolution.
There will always be early adopters and both EE and VOD clearly marketing to them.
Its textbook stuff for an operator to buy and hold spectrum just to stop another operator or entrant dominating. The data networks we have today are built on the back of very expensive 3G then tailored with 4G LTE etc as well as better and more efficient performance of continuing operations etc.
VOD and EE ont manufacture smartphones so probably profit on volume sale discounts etc. VOD does profit from data consumption and data service revenues are growing. Early adopters of 5G, like previous generations of handsets, get access to an incomplete but emerging portfolio of data driven/ data hungry services. Overtime, the retained and acquired base uses more 5G services.
Governments and countries are seriously moving forward with the industrial internet, smart factories, iot etc and consumers, businesses, enterprises who want to interact will need 5G devices…evolution, not revolution…The SP is currently priced like a utility as a consequence.
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