Vodafone Group Plc Chief Executive Vittorio Colao said on Monday that the telecom operator has the capability to spend around $40 billion on acquisitions in coming years.
Recently, Vodafone said it will receive $130 billion from a deal with Verizon Wireless to exit from the American telecom market.
Earlier, Vodafone maintained it will utilize a part of the $130 billion for returning to shareholders and improve networks.
Also read: Vodafone third quarter Capex up 21% to $2.9 billion
Colao’s statement on investments in telecom properties reflect Monday’s Reuters report suggesting that Britain’s Vodafone has offered to buy Spain’s largest cable operator Ono from its private-equity owners in a deal that could top $9.5 billion.
Ono sells fixed and mobile phone, TV and internet services. Vodafone’s offer, ahead of the Spanish company’s board meeting on Tuesday, was its second after the first was rejected as unacceptably low.
Vodafone faces tough competition from other bidders. Reuters report that U.S. cable firm Liberty Global has also expressed an interest in recent weeks.
According to media reports, Vodafone has started negotiations with India’s Tata group to buy stake in Tata Communications and Tata Teleservices.
Though Vodafone CEO is now talking about acquisitions now, the company is on the radar of AT&T, though it cannot bid for Vodafone for the next six months.
Vodafone recently increased its stake in its Indian venture to 100 percent by investing around $1.6 billion. It is also one of the active bidders in the ongoing spectrum auction in India.
“We are looking at acquisitions that are sizeable and could transform the company. The theory is that if an acquisition makes sense you should not be worried by the size because shareholders should approve it,” Colao said.
Vodafone may have $40 billion spending money after returning most of the Verizon deal proceeds to shareholders and investing $30 billion in its network over roughly two years if the company sticks to its target for a ratio of two to one for debt to earnings before interest, tax, depreciation and amortization, he said.
The company did not share specific names for the acquisitions.
He said that Vodafone has a roughly 16 to 17 percent share of the total telecommunications market and that it could increase this to a range of 20 to 23 percent.
Colao said his best opportunity to buy mobile assets may be in emerging markets as Vodafone could have trouble getting many deals past regulators in Europe because of its size there.
AT&T Chief Executive Officer Randall Stephenson has said he sees a “huge opportunity” to invest in mobile broadband in Europe if regulators make strides to encourage investment there including changes in how they allocate wireless airwaves to operators.
Pix source: The Hindu
