Vodafone clears decks for fixed-line services

To stay competitive, Vodafone will have to offer both fixed and mobile services, say analysts

As widely predicted, Vodafone announced a huge loss for the last tax year. Many observers said the move clears the way for a new strategy including broadband fixed-line services and heavier investment in emerging countries.

Vodafone declared a loss before tax of £14.9bn after writing down the value of earlier acquisitions and investments.

The announcement paves the way for Vodafone to invest in broader communications offerings, including converged services, after a protracted boardroom struggle for control.

“The loss is no surprise at all,” said Ovum principal analyst John Delaney. “This announcement was symbolic of [chief executive Arun] Sarin putting his stamp on Vodafone. It’s not about building an empire now, it’s about managing it. Sarin’s vision of Vodafone is what the company needs – running a tight ship with fewer adventures.”

Delaney said that further moves into areas such as fixed-mobile convergence, mobile internet and multiple-service packages make sense for Vodafone.

“Not having some kind of fixed element would be an increasing disadvantage,” he said. Mobile services in emerging countries will also be important, Delaney added.