Industry Trend Analysis - Vodafone's Exit Will Not Change Market Strategies - APR 2018

BMI View: Vodafone's exit from its Qatari subsidiary follows net losses since launching in 2009. We believe the operator will continue to focus on the private sector due to the high saturation levels, but the dominance of incumbent Ooredoo limits its chances of success.

Vodafone will sell its 22.95% stake in Vodafone Qatar to its joint venture partner, the Qatar Foundation, for QAR1.35bn (EUR301mn). The Qatar Foundation, a semi-private non-profit organization, will own 50% of Vodafone Qatar when the transaction is completed, while the remaining 38.1% is on free float on the Qatari stock exchange and the other 11.9% is owned by Qatari pension funds.

At the end of 2017, Vodafone Qatar had 1.39mn subscribers, but had lost subscribers in both 2016 and 2017, unable to effectively compete against incumbent Ooredoo. Its losses have been accumulating since it started operations in Qatar in 2009, reaching QAR4.3bn (USD1.18bn) in 2017. While Qatar has been facing economic strains since June 2017 due to the GCC diplomatic crisis and the business has not been one of the stronger performers in Vodafone's portfolio, we believe the decision is also part of Vodafone's wider strategy to sell minority assets it does not fully control, exiting countries such as China (2010) and France (2011).

Operators To Find New Growth Opportunities In A Saturated Market
Mobile Market Trends (2016-2022)
Source: BMI, operators, regulator.

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