Vodafone has been through a lot of change over the last few years. Most of this is thanks to a huge investment programme in Europe called Project Spring. The result of which is that Vodafone is now the third largest owner of infrastructure in Europe, alongside being the leading 4G provider.
For some time the increased investment put pressure on the balance sheet, occasionally bringing into question the security of the large and somewhat defining dividend. However, the cash pro le of the business has improved no end since the fruits of Project Spring have been brought to bear. Analyst consensus has this year’s dividend comfortably covered by free cash flow.
India has been another source of uncertainty. Reliance Jio entered the market, backed by one of the richest men in the world. Their tactic was to severely drive down pricing in order to establish market share. Vodafone India was amongst the casualties forcing the parent company to take a €5bn impairment. However, it has since been announced that the subsidiary will be deconsolidated from the Group and merge with another large Indian player; ‘Idea’. Vodafone has emerged from a di cult few years a stronger and more streamlined entity.
