Vodafone shares fell as much as 8.3 per cent after CEO Nick Read’s strategy showed higher capital expenditure on network investments will hit free cash flow.
Vodafone said it can increase margins in the medium-term and guided for adjusted earnings before interest, tax, depreciation and amortisation after leases between €15 billion and €15.4 billion in 2022, with adjusted free cash flow of at least €5.2 billion.
Organic service revenue rose 0.8 per cent in the fourth quarter. Read has sold some of the telecom group’s farther-flung units like New Zealand while cutting costs and consolidating operations in Europe and Africa. The centrepiece of this strategy has been carving out and listing Vodafone’s masts in the form of Vantage Towers AG.
The telecom group will focus on fixed and mobile connectivity in Europe, and mobile data and payments in Africa, the company said. That will mean upgrading fixed and wireless networks.
In Africa, the group had 84.9 million data users and mobile money platform M-Pesa handled 15.2 billion transactions in 2021, an increase of 25 per cent.
Vodafone has been the subject of press reports and speculation about potential consolidation deals as rivals around Europe merge; Liberty Global is set to combine its UK operations with Telefonica’s O2, while Spanish rival Masmovil Ibercom is snapping up Euskaltel.