Vodafone has pay-TV in view after UK revenues slide again
Friday 07 February 2014
Vodafone gave its strongest signal yet that it is considering a game-changing move into pay-TV in Britain yesterday as the mobiles giant seeks growth after UK revenues tumbled for a seventh consecutive quarter.
The 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, which will be contested fiercely by BSkyB and BT.
He would not comment on whether cash-rich Vodafone was considering specific moves, but 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 the German pay-TV and broadband firm Kabel Deutschland.
Mr Colao said the "convergence" of mobile, broadband, home phone and TV meant it was increasingly important to offer all these services. He added that 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.
He admitted he was "not happy" as group turnover dived 4.8 per cent to £9.86bn in the three months to December. Excluding acquisitions, UK sales fell 5.1 per cent, the seventh quarter in a row. However, overall turnover rose to £1.52bn thanks to the purchase of the fixed-line telecoms firm Cable & Wireless Worldwide. Vodafone won 191,000 contract customers but the total UK base fell more than 100,000 to 19.4 million because of a drop in less valuable pre-pay customers.
Analysts had expected the fall, and Mr Colao soothed worries by saying he sees "signs of better conditions" as Vodafone has started to increase revenue in Italy and Spain. 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.
The big football match: Vodafone is drawn in
Vodafone is having to consider entering TV in Britain because the war between BT and BSkyB over Premier League rights has had a dramatic ripple effect across the wider telecoms market.
BT has worked out what Sky already knew: exclusive TV content gets customers excited and is a great way to sell a package of home telecoms services such as broadband, home phone and mobile (which BT will start offering this year).
in the latest quarterly results BT reported its first quarterly growth in four and a half years and a 150,000 surge in broadband customers, following the launch of BT Sport.
With America's Liberty Global having bought Virgin Media last year, more consolidation is certain.
Vodafone may need to strike an alliance with Sky or TalkTalk – and other TV partners outside the UK – or risk being taken over by a big predator like America's AT&T.
Diving in at the deep end is no excuse for shirking the style stakes
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