Vodafone sells £3.1bn stake in SoftBank

Steve Dinneen
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VODAFONE yesterday continued its purge of non-core assets, as it announced a £3.1bn sale of its stake in Japanese carrier SoftBank.

The announcement comes after the £4.3bn sale of its interests in China Mobile.

Other non-core ventures likely to be disposed of soon include Vodafone’s 25 per cent stake in Poland’s Polkomtel and a 44 per cent stake in SFR, its French joint venture with Vivendi.

A decision on its large minority stake in US-based Verizon Wireless is not expected until 2012 but analysts expect Vodafone to maintain its interests in the hope dividend payments will resume.

Half of the cash from the Softbank sale will be used to pay down debt with Vodafone saying it is unsure how the second half will be spent. Two-thirds of the proceeds from the China Mobile sale will be returned to investors through a share buy-back programme.

Chief executive Vittorio Coalo also stressed the firm’s shift away from reliance on “voice” revenue – generated by calls – to data.

Mobile data is now worth in excess of £5bn a year to Vodafone and growing exponentially.

Colao, watching the analyst slideshow on his iPad, outlined plans for a tiered system for data payments that he says will be “better and fairer”.

The new system will see the six per cent of users responsible for 54 per cent of data traffic pay more.

Coalo was also bullish about Vodafone’s Indian venture, which he sees eclipsing the firm’s European operations.

He pointed to the relatively small (six per cent) data penetration in the market as a potential goldmine as smartphones continue their shift to the mainstream.

Vodafone raised its full-year guidance, saying it now expects adjusted operating profit of £11.8 to £12.2bn, versus an earlier forecast of £11.2 to £12bn, after sales grew faster than expected.

First-half core earnings fell 2.8 per cent on an organic basis to £7.4bn, compared with a forecast of £7.3bn. Ebitda margins declined by 1.7 per cent. First-half revenue rose 1.8 per cent organically to £22.6bn, beating a poll forecasting £22.3bn, as all regions performed well, including Verizon Wireless.