VODAFONE: Stirred but not shaken
By Alan Cane
Vodafone AirTouch has been hurt but not fatally wounded by the Orange deal. With its US presence, it can still claim to be the world's largest mobile phone group. Since yesterday, however, it is only the third largest in Europe.
In January, Chris Gent, Vodafone chief executive, snatched AirTouch from the grasp of the US regional operator Bell Atlantic.
Yesterday the situation was reversed. The deal between Mannesmann and Hutchison was closed in less than two weeks, allowing little time for Vodafone or any other potential predator to respond.
Orange has long been seen as a prize by other European operators. Once it became known Hutchison was willing to do a deal, speed was essential to head off competitive bids by other groups.
Yesterday's deal appears to have upset any plans Vodafone might have had to strengthen its presence in Germany by acquiring Mannesmann. The UK company has a 35 per cent stake in Mannesmann Mobilfunk, operator of Germany's largest mobile network D2, which it acquired through its purchase of AirTouch.
The two companies are also linked in Italy through the mobile operator Omnitel Pronto Italia, in which Mannesmann has a 55 per cent stake, against Vodafone's 15.5 per cent.
Both Vodafone and Mannesmann reiterated yesterday that the Orange deal would have no immediate effect on their relationship. Vodafone pointed out that Europe represented only one-third of its overall business, and there was no reason why it should not compete with Orange in the UK and collaborate with Mannesmann in Germany.
Klaus Esser, Mannesmann chief executive, said yesterday that the German company was in continuous discussions with Vodafone. Acquisition of the German company would not be "meaningful", he said.
Vodafone said its international strategy had not changed. "There will be no knee-jerk reaction" to the Orange deal, it said.
Vodafone neither needs, nor wants, to move quickly. Its agreements with Mannesman remain in place and it can afford to wait, for a year or so if necessary, to take advantage of any sustained decline in the German group's share price. |
