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Vodafone's anger at Ofcom decision unsurprising, says broker

Vodafone's anger at Ofcom decision unsurprising, says broker

Espírito Santo Investment Bank says it's not surprised by telecoms giant Vodafone's (LON:VOD) angry response to Ofcom.

The regulator has allowed operator Everything Everywhere, which runs Orange and T-Mobile, to launch 4G services ahead of an auction.

Vodafone reckons this gives the firm an advantage over rivals.

It means Everything Everywhere will be able to use some of its airwaves to carry the mobile signals.

Vodafone told the press: "We are frankly shocked that Ofcom has reached this decision.

“The regulator has shown a careless disregard for the best interests of consumers, business and the wider economy through its refusal to properly regard the competitive distortion created by allowing one operator to run services before the ground has been laid for a fully competitive market.”

Espirito analysts said in a note: "We are not surprised by Vodafone’s reaction but think it unlikely that Ofcom will backtrack on its decision.  

"Ofcom gave Everything Everywhere permission to launch ahead of the auction because it believed that the benefits to the consumer outweighed the impact on competition.

"In our view the best Vodafone can hope for is a delay in Everything Everywhere launching services."

Espirito rates Vodafone a 'buy' with a fair value of 210 pence a share (current price: 184.7 pence).

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