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
Recent study sparks fresh concerns about excessive phone use, as blue light from screens may be much more harmful t…
Follow CCS Insight
Shaun Collins
Congratulations Conor and Harvey. Brilliant effort from the lads, 49 mins and all in an really worthwhile cause.…
Follow Shaun
Ben Wood
RT @nickmcquire: As we predicted last year & will show at #ccspredicts in a few weeks, it has turned up a notch again in 2018 with implicat…
Follow Ben
Martin Garner
Great briefing yesterday from @qualcomm's @wellingmax on the need for energy-efficient AI with edge computing. The…
Follow Martin
Geoff Blaber
Crypto mining has been a consistent thorn in Nvidia's side. When demand was up it upset core customers. Now it's do…
Follow Geoff
Marina Koytcheva
@caro_milanesi Ah yes :) My mum grows zucchini and stuffs flowers with rice- delicious!! Do you grow your own zucch…
Follow Marina
Nicholas McQuire
As we predicted last year & will show at #ccspredicts in a few weeks, it has turned up a notch again in 2018 with i…
Follow Nicholas
Angela Ashenden
Chuckling watching Five Star’s System Addict on old #TOTP2.. in some ways it’s quite prophetic, if you can get past…
Follow Angela
Kester Mann
DT in an apparent swipe at United Internet, which is considering bidding in the upcoming German 5G auction and then…
Follow Kester
George Jijiashvili
For the Galaxy Note 9, Samsung is offering £300 trade in discount in addition to 0% finance to the owners of Note 8…
Follow George
Laura Simeonova
RT @benwood: P20 devices testament to Huawei's ambition in smartphone market. Consistently improving design, capabilities and appeal of its…
Follow Laura
Katie Taylor
Opt-out donation plan 'will not increase donors' - why you should let your family know your wishes
Follow Katie

Recent Blog Posts

Blog Post
Serious Concerns about Blue Light from Screens Researchers Say Extended Exposure Could Accelerate Blindness... Read more
Blog Post
Starry Internet, the Sequel Start-Up Launches Its Wireless Internet Service across the U... Read more
Blog Post
India's Ola Announces UK Push Ride-Hailing Company Looks for a Gateway to Europe Last wee... Read more
More blog

Latest Company News

Blog Post
Angela Ashenden Joins CCS Insight to Lead Business Collaboration Research Enterprise Research Coverage Continues to Expand ... Read more
More news