Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Vodafone Group plc (VOD - Analyst Report) CEO Vittorio Colao, in his recent visit to India and in discussions with Indian Finance Minister, revealed a significant investment strategy in that key market. The company is set to make a $3 billion investment over the next two years for strong infrastructural development in the company’s wireless platform. India is considered one of the two major markets by Vodafone for investments and expansion, the other being Germany. 

Vittorio Colao in his discussion with the minister also expressed concerns over the pending tax dispute of $2 billion related to acquiring the assets of an Indian mobile company. The problem dates back to 2007, when Vodafone Group acquired the stake of Hong-Kong based, Hutchison Telecommunications International Limited in an Indian mobile company –– Hutchison Essar Ltd.

The transaction, which took place through the Netherlands-based subsidiary of Vodafone Group, resulted in the company acquiring a 67% stake in Hutchison Essar Ltd. and total control over the Indian operations of the latter.

The Indian Supreme Court bailed out Vodafone last year, stating it does not hold any tax liability on transactions taking place overseas. However, the Indian tax authorities seem to think otherwise and changed the country’s tax law retrospectively in 2012 to levy the tax on Vodafone. The case is still pending, with nothing much being done in this regard.

We believe that if the case does not work in favor of Vodafone, it may also hurt investment prospects as much of the liquidity will have to be shelled out on regulatory charges.

However, despite this prevailing issue, Vodafone has an assured investment strategy in one of the world’s largest telecom market. It intends to fully acquire stakes in the company against the current 55% holding and strengthen its position as a long-term player.

Given the growth trajectory, the company is accelerating its investments in India in building infrastructure. According to media reports, the company stated that it invested approximately $8.8 since its entry into the Indian market.

Apart from India, Vodafone is also expecting to uplift its market positions in European countries like Spain, which were among the worst hit economies in Europe. Given the influx of $130 billion from selling Verizon Wireless stakes to Verizon Communications Inc. (VZ - Analyst Report) the company expects to go ahead with its acquitting plans in this market so as to proliferate its wireless business. 

Vodafone, which operates with other European carriers likeTelef (TEF - Analyst Report) and Orange (ORAN - Analyst Report) currently has a Zacks Rank #3 (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%