CHL China Mobile Limited

Vodafone Portugal – a subsidiary of British mobile phone giant Vodafone Group Plc (VOD) – announced plans to monitor the communications networks of U.K. and Ireland. The unit is currently looking after the Spain network.

In July, this year, the Operation Centre in Portugal started supervising the networks of Spain. Soon in October, the company added the monitoring of the access network in U.K. Vodafone Portugal would start inspecting the core network and services in Ireland by March 2013.

Based in Newbury, United Kingdom, Vodafone Group is the world’s largest revenue generating wireless communications operator and the second largest carrier after China Mobile Limited (CHL) based on subscriber count.

Vodafone – which enjoys strong presence in Europe, the Middle East, Africa, Asia Pacific and the United States – is capturing more markets due to the strong adoption of data services and migration to smartphones.

We believe that Vodafone’s future growth hinges on strategic components including increasing mobile data services as well as boosting growth in enterprise segments by implementing converged fixed and mobile services (Vodafone One Net)

Expanding in new areas including machine-to-machine, near-field communications and mobile financial services along with maintaining liquid investment in quality networks will likely enhance the company’s profitability in the coming quarters. Vodafone also has a strong balance sheet and is one of the top dividend payers in the industry.

However, we prefer to stay on the sidelines following the weak results in the first half of fiscal year 2013. Half-yearly consolidated revenue was £21.78 billion ($34.5 billion), representing a year-over-year and organic drop of 7.4% and 0.2%, respectively.  Challenging conditions in southern Europe that intensified following threats of recession due to the sovereign debt crisis affected the results.

Moreover, harsh regulatory terms and stiff competition will continue to dampen service revenue and subscriber count in the coming days.

Vodafone currently holds a Zacks #3 Rank, which implies a short-term Hold rating. We also maintain a long-term Neutral recommendation on the stock.
 

 
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