Vodafone (LON:VOD) is planning to use its expertise in customer data to fend off competition in Italy from French newcomer Iliad, Reuters has reported. The move will come as the London-listed group looks to avoid an India-style price war.
Vodafone’s share price rose yesterday, adding 0.57 percent to 228.35p, outperforming the broader UK market, with the benchmark FTSE 100 index shedding 41.81 points to end the session 0.56 percent lower at 7,372.61. The telco’s shares have added more than 11 percent to their value over the past year, and are up by some 14 percent in the year-to-date.
Telco faces competition in Italy
Sources with knowledge of the matter told Reuters yesterday that Iliad, backed by French billionaire Xavier Niel, was aiming to grab a quarter of the Italian mobile market using the same cut-throat prices which helped it to conquer France five years ago.
“Do we expect something crazy? Honestly, after India, you can expect everything. We are ready to see everything,” Vodafone CEO Vittorio Colao said at Morgan Stanley’s annual TMT conference in Barcelona, as quoted by the newswire. In India, the company moved to merge its local unit with Idea Cellular after new entrant Reliance Jio took more than six percent of the country’s market in just a year.
Colao further noted that Vodafone’s data analytics had allowed the company to identify its ‘most vulnerable’ Italian customers and offer them special conditions adapted to their needs. He also said the telco had prepared for several possible scenarios but declined to give more details about its strategy.
Analysts on Vodafone
In analyst news, Barclays, which has a ‘neutral’ rating on Vodafone, set a price target of 230p on the shares today, while Deutsche Bank remains bullish on the company with a ‘buy’ stance and a valuation of 300p. According to MarketBeat, the blue-chip telco currently has a consensus ‘hold’ rating and an average price target of 245.77p.
Vodafone updated investors on its interim performance this week, lifting its full-year earnings outlook.