Intrigue in the Med

Vodafone Malta Consolidation Creates Potential Duopoly

At first glance, this week's announcement of further consolidation in Vodafone's international portfolio appears to be fairly minor news. However, the proposed transaction does raise a couple of intriguing issues.

Vodafone intends to merge its Maltese business with Melita, presently owned by financial investors Apax Partners and Fortino Capital. Vodafone will take a 49 percent stake in the new entity, which is expected to have a total valuation of about €500 million.

Looking at Vodafone as a sum of its parts, its operations in Malta are worth little more a fraction of a percent of the group's overall enterprise valuation. But such a view confirms that Vodafone is continuing its current strategy of taking a convergence-driven consolidation approach to its businesses.

Over the past year, Vodafone has announced mergers of its operations in the Netherlands and India. Part of the rationale has been down to converged broadband networks — mobile and fixed — positioning Vodafone as a multiplay provider and, significantly, no longer in majority control of its businesses. Malta continues this trend.

The second intriguing aspect of the proposed Malta deal is that it would see the market consolidate to just two mobile operators. Of course there are already countries where there are only two networks, the absolute minimum to keep the World Trade Organisation happy. The United Arab Emirates and Qatar are two notable examples.

But Malta throws up the scenario of three operators reducing to two, not five to four or four to three as has been observed and approved by regulators recently. Vodafone and its merger partners will be emphasising the benefits to consumers of better services and more investment.

Assuming Vodafone gains regulatory approval — and I would expect it to be granted, subject to concessions such as a partial return of spectrum — we will have the situation of a duopoly being created, even if it turns out to be temporary. An interesting precedent would be established.

This entry was posted on May 26th, 2017 and is filed under Services. You can follow any responses to this entry through the RSS 2.0 feed or you can leave a response.

Posted By Tony Worthington On May 26th, 2017

(There are no comments yet)
Leave a Comment

Hot News

Team Tweets

CCS Insight
A look at the next wave of collaboration tools hoping to solve the problem of technology overload in the workplace,…
Follow CCS Insight
Shaun Collins
RT @kestermann: Total UK mobile data traffic continues to show strong growth on 4G (now tailing off on 3G). @CCSInsight’s latest UK forecas…
Follow Shaun
Ben Wood
Quick shout out to Crissia in the @FitBark team for the excellent support today. Was having some problems correctly…
Follow Ben
Martin Garner
Very interesting briefing just now with @retarus on "information logistics" - the Industrial IoT world increasingly…
Follow Martin
Geoff Blaber
Oh my.. The Verizon Y branding has now vanished entirely.. What happened to "doubling down and focusing on the netw…
Follow Geoff
Marina Koytcheva
Well done to @giffgaff for turning the outage PR nightmare into a positive story! Almost 39% of members chose t…
Follow Marina
Nicholas McQuire
Which tech brand does IT trust the most with their company data? #Microsoft now leaps ahead of the rest - includi…
Follow Nicholas
Kester Mann
RT @MarinaKoytcheva: Well done to @giffgaff for turning the outage PR nightmare into a positive story! Almost 39% of members chose to d…
Follow Kester
Angela Ashenden
RT @nickmcquire: Which tech brand does IT trust the most with their company data? #Microsoft now leaps ahead of the rest - including secu…
Follow Angela
George Jijiashvili
RT @MarinaKoytcheva: Great job opportunity for a quantitative analyst: @CCSInsight is looking for a smart person to join our market forecas…
Follow George
Katie Taylor
RT @bengoldacre: In 2017 @NHSengland published a list of things GPs should not prescribe. Six months on, we checked the data to see what i…
Follow Katie

Recent Blog Posts

Blog Post
Postmates' Food Delivery Bot Robots Like This Could Be the Future of Delivery Postmates ... Read more
Blog Post
The Digital Workplace Hub The Next Wave in Collaboration The collaboration software m... Read more
Blog Post
The Money Trail The Bane of Location Tracking We gain a lot from smartphone... Read more
More blog

Latest Company News

Blog Post
Virtual Reality Device Market Declines in 2018 But Outlook Remains Positive Research firm CCS Insight forecasts 8 million virtual realit... Read more
More news