MARKET ANALYSIS

Vodafone Market (Equity Analysis)



Vodafone Market (Equity Analysis)

Market Overview

The telecom sector in United Kingdom is composed of fixed line telecoms and wireless data packages which include mobile networks and broadband. The telecommunication is primarily earning through the fixed line communications and voice packages which include data and other transmission services which are charged through bundles and other data plans. The definition of wireless market is primarily consists of mobile phones and other wireless devices. The combine market value is determined from the wireless subscriptions and value added services.

Market analysis

The telecommunication market in United Kingdom is facing decline due to its saturation and maturity. The packages are no more evolving the competition is becoming fierce and the competitors are fighting for each other's territories. The trend is foreseeable till 2016 and onwards. There are no possible chances of revival of the industry because LTE has also been established and no other technology is nearby which can be implemented. The total revenues which have been generated in 2011 consisted of $58.9 Billion and the Compounds Annual Growth rate has been recorded of -2.8percent (MarketLine, 2012)..

The French telecommunication market has shown increase and recording a Compounds Annual Growth rate of 1.5percent. The German Market also decline but at a slower rate of -0.2percent. From 2007-2011 the consumption levels in the market have increased and the subscriber bank reached to 114.8 Million. The market subscriber bank is expected to increase by adding to 119.5 Million Subscribers in 2016 keeping the compound Annual Growth Rate to 0.8percent for the years 2011-2016. The largest proponent of the UK telecom sales is the Wireless telecommunication maintaining subscriptions worth $35.6 Billion which represent 60percent of the telecom market. Fixed line services remained on the second number by clocking in at $23.3 Billion which represent 40percent of the market share. The expected developments in the market foresee a CARC of -2.7percent for the 5 years ending 2016. The market value will be driven up by 51.4 Billion by 2016. The French Market will increase by 0.1% and the German Market will also be declining by -1.9 Percent to 2016 (MarketLine, 2012).

Market Reports

The market growth reports of UK suggest that the UK telecommunications sector will continue to show exponential growth in the upcoming years. The 3G subscriptions will be increasing and the amount of subscription will be around 60.875 Million in 2016 as expected. The subscription of the cellular market will be increased to 85.597 Million users in 2016. The prediction of the market growth suggests that it will decline in 2016 because of increased market penetration. 3G subscriptions will be increased because the individuals demand for smart phones has increased which has resulted in increased demand for the 3G connections and subscriptions. The increase in subscriptions has resulted in increase revenue generation. The fixed line market will be contracted despite the increase in a 9M11 rate because operators are now offering bundled provision for the products (Ofcom, 2012).

Vodafone and O2 along with other cellular companies have reported ...