Vodafone flexes financial muscle
Telco pledges $2.38bn investment in AMAP region in next two years
UK-based mobile operator, Vodafone, plans to invest $11.1bn in capex in the next two financial years, including $2.38bn to extend 3G coverage across major cities and key regions in Africa, Middle East and Asia Pacific (AMAP).
Vodafone also said that it would establish a "fibre footprint" to enable converged services in key business areas for its AMAP operations.
The investments are expected to improve competitive performance and deliver "attractive" returns, the telco said in a statement. "We expect to generate incremental free cash flow of over £1bn [$1.6bn] in the 2019 financial year. The total cash payback is expected to be approximately seven years," the company added.
Vittorio Colao, CEO, Vodafone, said: "We have continued to make good progress in delivering our long-term strategy. Our emerging markets businesses are performing very well, driven by rapidly increasing smartphone penetration and data usage."
The capex plan will be funded partly from the proceeds of the sale of Vodafone's 45% interest in its US joint venture, Verizon Wireless, to Verizon Communications Inc for $130bn.