Vodafone share price: Telco mulls building own broadband network
Vodafone (LON:VOD) is weighing a major investment in its own broadband network in the UK, The Telegraph has revealed. The potential move would challenge FTSE 100 rival BT Group (LON:BT.A) which avoided a full-blown break-up last week as industry regulator Ofcom recommended more independence for its network division Openreach within the larger group.
Vodafone’s share price has slipped marginally into the red in London this morning, having shed 0.11 percent to 229.70p as of 08:32 BST. The decline is part of losses in the broader market, with the benchmark FTSE 100 index currently standing 0.38 percent lower at 6,668.69 points. The telco’s shares have lost about five percent of their value over the past year, but have recovered just under four percent in the year-to-date.
The Telegraph reported over the weekend that Vodafone had been carrying out tests in recent weeks to explore whether it could use BT’s underground ducts and telegraph poles to lay its own ultra-fast fibre-optic cables into millions of homes and businesses. Industry sources told the newspaper that the work had been done in stealth in the Norfolk town of King’s Lynn, with Vodafone not yet committed to an investment and having serious concerns about the viability of the idea in the UK. Sources familiar with the work noted that there were problems with blocked ducts, costs and the availability of maps of BT’s ducts.
The move comes with Vodafone looking to grow in the UK where the group is facing stiff competition from rivals BT and Sky (LON:SKY).
In analyst ratings, Independent Research GmbH, which has a ‘neutral’ rating on Vodafone, set a price target of 240p on the stock last week. Deutsche Bank meanwhile reiterated its ‘buy’ stance on the group, valuing the shares at 310p.
As of 08:53 BST, Tuesday, 02 August, Vodafone Group plc share price is 229.95p.