Vodafone(LSE: VOD) is makingwaves across Europe as the company redesigns the European telecommunications market.
Along with rolling out the largest 4G LTE capable network across mainland Europe, the company is now looking to shake up the UKs telecoms market. Vodafone plans to do this by taking onBT,in a market thatthe British stalwart hasdominated for many years.
Broadband push
Vodafone isset to reveal plans within the next few weeksfor a push into the UK consumer broadband market. Vodafone is retaliating as rivals BT andSky,make an assault on Vodafones mobile market share, by signing deals to expand their mobile services.
In particular, Vodafone is planning to launch home broadband this spring, before adding a cloud-based TV service later in the year. These new services, along with Vodafones existing mobile offering will then be bundled together and offered to customers as a simplified multimedia bundle.
As part of this drive to improve its customer offering, Vodafone isplanning to connect its existing fibre broadband network to about 1,000 of BTs larger exchanges. Enabling the company to offer high-speed broadband to most of the UK.
Welcome development
This news is a welcome development for Vodafones shareholders. You see, Vodafone has been struggling in the UK for some time. And the recent spate of mergers in the sector is only going to make it harder for Vodafone to grow sales over the long term.
However, Vodafone has an advantage over other competitors in the broadband market because it acquired a large national fibre network with the purchase of Cable & Wireless Worldwide in 2011. Whats more, the companys fibre network uses the most up to date equipment, allowing Vodafone to offer higher network speeds than thetraditional local exchanges. This gives the international group an edge over smaller peers like Sky and TalkTalk.
Additionally, Vodafones proposedcloud-based TV package is an innovation that puts the company ahead of its peers. Indeed, cloud based TV service will have lower set-up costs than the traditional cable, or satellite based television networks currently on offer.
Good news for investors
Overall, Vodafones plan to dominate the UK multimedia market looks like it could work out for the company. A low-cost cloud based TV service and high-speed broadband network will give the company an edge over its peers and should help the group win over customers.
Still, Vodafones key selling point for investors is the companys international exposure and market-leading dividend yield. Two traits many of the companys UK peers do not have.
As a result, analysts believe thatVodafones earnings are set to expand by 23% during 2017, as the company starts to benefit from its European infrastructure redevelopment and growth here the UK.
So, if you like the look of Vodafone’s growth prospects, I strongly recommend that you do some additional research of your own, before making any trading decision.
To help you assess the company, our top analysts have put togetherthis new report from The Motley Fool.
The report guidesyou through the seven key steps all successful investors follow before making an investment. And the report teaches you everything you need to know in under 20 minutes!
Don’t delay, this report is only available for a limited time. Soclick hereto read your copy of thefreereport today!
Get FREE Issues of The Motley Fool Collective
Get straightforward advice on whats really happening with the stock markets, direct to your inbox. Help yourself with our FREE email newsletter designed to help you protect and grow your portfolio wealth.
By providing your email address, you consent to receiving further information on our goods and services and those of our business partners. To opt-out of receiving this information click here. All information provided is governed by our Privacy Statement.
Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has recommended Sky. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
