Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: S100 who wrote (101983)	7/23/2001 10:36:32 PM
From: S100	Respond to of 152472

Vodafone's Gent faces the music Mobile phone giant's strategy in question as AGM looms By Gareth Vaughan, FTMarketWatch 12:40:00 PM BST Jul 23, 2001 LONDON (FTMW) - Things could certainly be better for Vodafone [UK:VOD] chief executive Sir Christopher Gent as he heads into the company's annual general meeting on Wednesday. Vodafone shares are at near-three year lows and his beloved England cricket team, which is sponsored by Vodafone, is being dragged through the mud by Australia -- yet again. Then there's the Conservative party, in which Gent used to head the Young Conservatives, and its divisive leadership contest. Shareholder anger Gent is also expected to face shareholder wrath after he was awarded a further 8.95 million stock options. Some shareholders had already been angered by the revelation that the boardroom's remuneration for the year to March 31 had jumped to £28.6 million from £6.7 million in the previous year. That is despite Vodafone's shares falling 45 percent over the 12-month period. See related story. To top it all off, worries that the company's vast outlay on third generation (3G) licences and networks might turn out to be a financial version of the charge of the Light Brigade are persisting. Gent, who has been widely regarded as one of Britain's most successful businessmen in recent years, is now facing serious questions over Vodafone's strategy. Market cap less than Mannesmann purchase price After hitting a high of 399 pence at the height of the tech boom in March 2000, Vodafone [US:VOD] shares were down 1.6 percent at 139 pence on Monday morning, levels not seen since October 1998. That left the company's market capitalisation at £96 billion, below the €183 billion (£112 billion) the British group paid for Germany's Mannesmann in early 2000. The latest pressure on Vodafone's share price stems from comments Gent made in an interview published on Friday. He said Vodafone was slowing construction of its 3G networks as it wasn't convinced a sufficient number of handsets would be on the market in time for the company's planned 3G launch in late 2002. A delayed launch of its 3G services would bring into question whether Vodafone could meet its targets of generating a return on its 3G investments in 4-7 years. Those investments include £13 billion spent on licences and £10 billion on rolling out its European 3G networks over the next five years. Vodafone is already dealing with a delay in the availability of general packet radio service (GPRS) handsets from manufacturers such as Nokia [US:NOK]. This is bad news for Vodafone and rivals like Orange [FR:007919] who are counting on GPRS and 3G to boost their revenue as customers adopt the data services enabled by the always-on high-speed Internet access the new technologies offer. Shares await new home Then there's the overhang. Up to five percent of Vodafone's total share capital could flood the market this year. That's because the group, based in Newbury, Berkshire, used shares to fund its acquisition spree over the past couple of years. This has left the likes of Banco Santander Central Hispano [US:STD] and Hutchison Whampoa [US:HUWHY] with billions of shares, of which they don't plan to be long-term holders. On July 4 Banco Santander said it had reduced its stake to 1.62 percent from 2.71 percent raising about £1 billion. Hutchison still holds 1.2 percent of Vodafone while KPN [NL:00908] and Telia [SE:000066792] have recently sold stakes they had swapped for holdings in Ireland's Eircell last December. See related story. Expansive questions Questions have arisen over Vodafone's aggressive expansion strategy that sees it operate in 29 countries with some 93.1 million customers just 16 years after its UK network was launched. Has the company put quantity ahead of quality financial performance? Vodafone's results for the year to March 31 revealed a huge jump in goodwill amortisation charges to £11.8 billion from £1.7 billion in the previous year largely relating to the Mannesmann takeover. That meant Vodafone posted a group operating loss of £6.9 billion versus a profit of £1.7 billion. See related story. 'Buy' Despite all this John Tysoe, a telecoms analyst at West LB Panmure, says Vodafone's a "bang on the table screaming buy" on a fundamental basis at current prices. And if you believe in the future of the mobile phone industry, it's hard to argue with him. With net debt well below major rivals at £6.7 billion and an unrivaled global footprint, Vodafone remains the best-placed company in the sector. Aside from the AGM, Vodafone is also expected to release information this week showing whether the average amount its customers spend has been rising. Analysts will look closely to see whether Vodafone's change of focus to raising profit margins and lifting cash flow rather than winning customers and boosting market share, is working. The AGM begins at 11am on Wednesday at London's Hotel Inter-Continental. Gareth Vaughan is a reporter for FTMarketWatch in London. ftmarketwatch.com{2EAC08CA-8171-4AEC-AAE8-DCC37F48E346}&source=moreover1