Could UK acquisitions revitalise Vodafone?

Shareholders may not be convinced, says analyst

Vodafone may be looking at UK-based acquisitions

Mobile giant Vodafone’sefforts to reinvent itself as a full communication service provider could be boosted by UK-based acquisitions, according to reports.

Vodafone has been identified as one of three potential buyers for Phones4U, according to The Daily Telegraph, which cites sources close to the high street mobile phone retailer’s private equity owners.

The paper also speculates that Vodafone could be interested in acquiring telecoms firm TalkTalk, which provides many mobile and home phone, broadband and pay-TV services.

The speculation comes shortly after Vodafone group chief executive Vittorio Colao acknowledged that the company needed to think about consolidation and the type of communication services it provides. He has also talked of concentrating on Vodafone’s three key regions: Europe, Sub-Saharan Africa and India, so it is perhaps unsurprising to find the company linked to targets in those regions.

But any rumours of acquisition targets should be treated with a degree of skepticism because it was far from clear that Vodafone would be looking to make any big acquisitions, never mind a retail chain or fixed-line services, said Emeka Obiodu, senior analyst at IT researcher Ovum.

“It would be a remarkably tough sell to persuade the Vodafone shareholders such acquisitions would be money well spent,” said Obiodu.

Even if the reports prove to be wide of the mark, there is little doubt that Vodafone is undergoing a period of reorganisation.

As part of that consolidation process it has already sold off its stake in China Mobile for £4.3bn. It has long been thought that Vodafone also wants to divest itself of its 45 per cent stake in US-based mobile firm Verizon Wireless.

Vodafone had not returned calls for comment at the time of writing.