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Beaufort Securities Breakfast Alert: Vodafone

Beaufort Securities Breakfast Alert: Vodafone

Markets
London

The FTSE-100 finished Friday's session 0.64% higher at 7,044.39, whilst the FTSE AIM All-Share index closed 0.04% up at 826.57.
Wall Street
In New York on Friday, the Dow Jones fell 0.15% to 18,240.49, the S&P-500 lost 0.33% to 2,153.74 and and the Nasdaq fell 0.27% to stand at 5,292.41.
Asia
In early morning trade in Asia this morning, the Nikkei 225 had fallen 0.62% to 16,860.09, while the Hang Seng declined 0.42% to 23,851.82.
Oil
First thing this morning, WTI crude was down 0.84% to $49.39/bbl and Brent was down 0.75% to $51.54.

Headlines
RBS squeezed struggling businesses to boost profits, leak reveals

Royal Bank of Scotland secretly tried to profit from struggling businesses, leaked documents show. The bank bought up assets cheaply from failing businesses it claimed to be helping, the confidential files reveal. Staff could boost their bonuses by finding firms which could be squeezed in what it called a "dash for cash". RBS said it had let some small business customers down in the past but denied it deliberately caused them to fail.

Company news

Vodafone (LON:VOD, 223.55p) - Buy
Vodafone India has acquired spectrum in all its key telecom circles in the spectrum auction for a total cost of INR 202.8 billion (€2.74 billion), outspending its competitors. The new spectrum significantly enhances the coverage, capacity and speed of Vodafone India's 4G data services in its key circles, complementing existing high-quality 2G and 3G voice and data capabilities. Vodafone India acquired a total of 2 x 82.6 MHz FDD and 200 MHz TDD spectrum in the auction, providing high-capacity, multi-band 4G capability operating across the 1800, 2100 and 2500 MHz bands. Vodafone India now has 17 circles with 4G capability, covering 91% of the company's total revenues and 94% of mobile data revenues. Vodafone's investment totals INR 202.8 billion (€2.74 billion) of which INR 101.4 billion (€1.36 billion) is payable up-front. The spectrum acquired has a 20-year term.

Our view: Vodafone India has the largest voice and data traffic usage within the Vodafone Group and has more than 200 million customers. At 30 June 2016, Vodafone India had 69.7 million data users, of which 32.3 million use 3G/4G. Vodafone's has focused on areas where it has a strong market presence and the additions with these circles make sense. India is an emerging market in the mobile arena and there is plenty of scope in the data space. A note of caution is the emergence of a new entrant into the India mobile market, Jio. However, we maintain our Buy recommendation.



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