Morningstar Rating

Stock Research and Analysis

by Allan C. Nichols, CFA

Bulls Say

Vodafone sold its stake in Verizon Wireless and distributed about 71% of the proceeds to shareholders, leaving it with a stronger balance sheet. The stronger balance sheet is enabling it to outspend its competitors in upgrading its network, while allowing it to increase dividends and make acquisitions.
The firm has increased its focus on operations it controls. India, in particular, is showing signs of improvement.
Vodafone acquired Kabel Deutschland and Ono, increasing its position in offering converged telecom services as well as reducing costs. Read more 

Bears Say

Competition is increasing globally, which is driving down ARPU. Attempts to increase ARPU by moving customers to higher-priced 4G plans are progressing slowly, with only 4.7 million 4G subscribers.
Vodafone could overpay for more acquisitions like Kabel Deutschland and Ono.
The Indian government is a thorn in Vodafone's side. After the Indian Supreme Court ruled in Vodafone's favor regarding its $2.5 billion tax dispute with the government for its acquisition of Hutchison Essar in 2007, the government proposed a new law retroactive to 1962, which could require the firm to pay the tax. Read more 

Management

Vittorio Colao replaced Arun Sarin, who retired in 2009, as CEO after serving as CEO of Europe and deputy CEO for Vodafone. Previously he was CEO of RSC MediaGroup, a leading publisher in Milan, a position he took after leading Omnitel Pronto Italia   Read more 

Profile

With 435.9 million proportional customers (total customers multiplied by its ownership interest), Vodafone is one of the largest wireless phone companies in the world. It   Read more 

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