Vodafone local unit eyes windfall

By InvestSMART · 10 Sep 2013

By InvestSMART ·
10 Sep 2013

Comments

Vodafone Australia customers are set to benefit from a $US130 billion ($141 billion) deal between US-based Verizon and the British Vodafone Group as proceeds of the deal start to flow to operations around the globe.

US mobile giant Verizon announced last week it would buy out the Vodafone Group's share in Verizon. Most of the proceeds were expected to flow back to Vodafone Group Plc shareholders, but the London-based company also announced £6billion ($10.2 billion) would go towards additional capital expenditure across all of its markets in a three-year spending spree dubbed Project Spring.

"We can confirm that Australia will be one of the markets to benefit from Project Spring, which is incredibly exciting given Vodafone's already strong spectrum holdings in this market," a spokeswoman for Vodafone Hutchison Australia said.

Exactly how much money trickles down to Australia remains to be seen.

Read the full story at theage.com.au/it-pro

Go to Google News, then click "Follow" button to add us.

Share this article and show your support

Frequently Asked Questions about this Article…

What is the Verizon–Vodafone deal worth and who is involved?

The deal involves US mobile giant Verizon buying out the Vodafone Group’s stake in Verizon. The transaction is reported at about US$130 billion (roughly $141 billion), with proceeds set to flow back to Vodafone Group and its operations around the globe.

How will Vodafone Australia customers benefit from the Verizon–Vodafone transaction?

Vodafone Australia customers may benefit because Vodafone Group has earmarked part of the deal proceeds for extra capital spending across its markets. Vodafone Hutchison Australia has confirmed Australia will be one of the markets to benefit from this funding boost.

What is Project Spring and how much money has Vodafone allocated to it?

Project Spring is Vodafone Group’s three‑year spending initiative to increase capital expenditure across its markets. The company announced about £6 billion (around $10.2 billion) will be directed to this program.

Will Vodafone shareholders get any of the proceeds from the Verizon sale?

Yes. The article says most of the proceeds were expected to flow back to Vodafone Group Plc shareholders, in addition to the portion set aside for Project Spring capital spending.

How certain is it that Australian operations will receive funding from Project Spring?

Vodafone Hutchison Australia confirmed that Australia will be one of the markets to benefit from Project Spring, but the article notes that exactly how much money will trickle down to Australia remains to be seen.

Why is Vodafone’s spectrum position in Australia important for investors?

The spokeswoman for Vodafone Hutchison Australia pointed out the company already has strong spectrum holdings in Australia. For everyday investors, that suggests any capital spent under Project Spring could be used to enhance network capacity and services where Vodafone already has valuable spectrum assets.

Which companies should investors watch related to this news?

The main companies mentioned are Verizon (the US mobile operator buying out the stake) and Vodafone Group (the London‑based seller). Vodafone Hutchison Australia is the local Vodafone unit expected to benefit from Project Spring funding.

Where can I read more about the Verizon–Vodafone deal and Project Spring?

The article directs readers to the full story at theage.com.au for more details. That source covers the Verizon buyout and Vodafone Group’s Project Spring announcement.