Vodafone Group CEO Nick Read (pictured) brushed-off the impact of the proposed merger of O2 UK and Virgin Media on its business in the country, adding access to wholesale fibre, its spectrum assets and business footprint places it in a strong position.
During its results call for the year to end-March, Read said he was “delighted with performance in the UK” adding the company was in an excellent position to challenge BT in the lucrative business sector, and was happy relying on organic growth and wholesale fixed agreements in the consumer sector.
Last week rival Telefonica struck a deal to merge its mobile unit in the country with Liberty Global’s fixed and TV operation Virgin Media, a company long rumoured to be in the crosshairs of Vodafone.
On consumer, Read added: “We have access to wholesale [fibre] so we can offer a converged proposition. When it comes to TV, the UK is an OTT market.”
He added he was confident on Vodafone’s prospects in the market as Telefonica and Liberty Global’s brands “will go through a complex integration over many years”.
Alongside its financial results, Vodafone announced expanded efforts to slash its European operating expenses, with a further €1 billion of cuts planned over a three year period.
In November 2018, the company unveiled plans to trim €1.2 billion from annual expenses by end-March 2021. Of this, Read said €800 million had already been made and during the process it had uncovered further opportunities to cut opex.
By end-March 2023, Vodafone plans to cut €1 billion off its costs compared with the end of fiscal 2020 (to end-March 2020), in place of the €400 million earmarked for its current fiscal year.
Alongside opex savings, the company is also in the process of separating its tower assets in Europe, a move it reports as on-track with the majority of the legal and operational separation now complete. It plans to IPO the unit in early 2021 subject to market conditions.
In fiscal 2020, revenue increased 3 per cent year-on-year to €44.9 billion while its net loss was drastically lower at €455 million compared with €7.6 billion, following a number of one-off costs in the prior year.
It became the latest operator to decline to issue earnings guidance for the current financial year due to the ongoing Covid-19 (coronavirus) pandemic. CFO Margherita Della Valle noted there would be a significant hit its H1, with the largest impact expected in a reduction in roaming revenue.
Della Valle said the evidence in Europe pointed to a reduction of up to 75 per cent in the metric.Subscribe to our daily newsletter Back