Vodafone’s £19bn spending spree

Cash-rich Vodafone has announced ambitious plans to upgrade its network.

Vodafone has announced its biggest-ever investment programme. It is spending £19bn over the next two years on upgrading networks, mostly in Europe. Having just disposed of its stake in America's Verizon for $82bn, it has ample cash.

The news accompanied lacklustre quarterly results, with lower revenues in Europe the key problem.

What the commentators said

It makes sense for Vodafone to try to get ahead of "a predicted explosion" in data demand as internet usage on mobile phones grows, noted Quentin Webb on Breakingviews. The trend should favour operators with high-quality networks.

Moreover, competition has intensified of late. The advent of mobile broadband has made life easier for former telecoms monopolies and cable companies, who can combine offerings such as fixed-line telephony and TV with cheap mobile services.

If Vodafone is right in thinking that Europe is set to recover, "now is as good a time as any to press the accelerator", said Nils Pratley in The Guardian.

However, it could be years before the investment splurge begins to show results. So you can't blame shareholders for hoping, as continually rumoured in the past few months, that America's AT&T will turn up with a bid.

Recommended

The British equity market is shrinking
Stockmarkets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019
Beyond the Brexit talk, the British economy isn’t doing too badly
Economy

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019
Beware: even the greatest brands can fail
UK Economy

Beware: even the greatest brands can fail

For decades, John Lewis seemed to exist in a parallel universe. Now, a grimmer reality has dawned
27 Sep 2020
What's behind Britain's coronavirus testing disaster?
UK Economy

What's behind Britain's coronavirus testing disaster?

Britain’s system of testing for the virus that causes Covid-19 collapsed just when we needed it most. What went wrong?
26 Sep 2020

Most Popular

How the stamp duty holiday is pushing up house prices
Stamp duty

How the stamp duty holiday is pushing up house prices

Stamp duty is an awful tax and should be replaced by something better. But its temporary removal is driving up house prices, says Merryn Somerset Webb…
25 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Can Rishi Sunak’s winter plan save the UK economy?
UK Economy

Can Rishi Sunak’s winter plan save the UK economy?

With his Winter Economic Plan, chancellor Rishi Sunak is hoping to support the economy through the dark months ahead as restrictions tighten again. Jo…
25 Sep 2020