Vodafone eyes pay-TV as UK revenues tumble

Game on? Vittorio Colao suggested buying up Premier League rights could be a long-term possibility for the mobiles giant

Vodafone has given its strongest signal yet that it is considering a game-changing move into pay-TV in Britain as the mobiles giant seeks growth after UK revenues tumbled for a seventh consecutive quarter.

Chief executive Vittorio Colao said: “We are watching the space. Today, there’s not an urgent need to be there. It could be different in six to seven months.”

He even suggested buying up Premier League football rights could be a possibility in the “very, very long term”, although he all but ruled out taking part in the next auction due this autumn that will be contested fiercely by BSkyB and BT.

He would not comment on whether cash-rich Vodafone was considering specific moves, although analysts have speculated about a takeover of TalkTalk or an alliance with Sky.

Vodafone has moved into pay-TV in Portugal and New Zealand and is close to finalising its takeover of German pay-TV and broadband firm Kabel Deutschland.

Colao said the “convergence” of mobile, broadband, home phone and TV meant it was increasingly important for Vodafone to offer all these services.

He admitted he was “not happy” as group turnover dived 4.8 per cent to £9.86 billion in the three months to December. UK sales fell 5.1 per cent on an organic basis, the seventh quarter in a row.

However, overall turnover rose to £1.52 billion in Britain thanks to the acquisition of fixed-line telecoms firm Cable & Wireless Worldwide.

Vodafone won 191,000 contract customers. However, the total UK base fell over 100,000 to 19.4 million because of a drop in less valuable pre-pay customers. 

Emerging markets such as India and South Africa grew but failed to offset the slide across Europe.

Analysts expected the fall and Colao soothed worries by saying he sees “signs of better conditions” as Vodafone has started to increase revenue in Italy and Spain by selling fixed-line broadband as well as mobile.

Feedback has also been good since Vodafone began offering Premier League video clips from Sky Sports and music from Spotify to British customers who take its super-fast 4G service. Data usage is more than double that of 3G.

Colao said the fast-changing telecoms market meant Vodafone could become interested in owning TV rights. “Is it possible longer term that there is some convergence on bidding for content? It’s possible,” he acknowledged, pointing out few people would have linked Virgin Media owner Liberty Global with a takeover move for Formula 1 before rumours surfaced last week.

The shares rose 6.2p, or 2.8 per cent, to 222.2p.

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