What happened

Shares of Vodafone Group (NASDAQ:VOD) jumped on Friday after the company reported results for the first quarter. Along with the quarterly report, the company finalized a network sharing partnership with Telecom Italia and announced a plan to separate its European tower infrastructure into a new organization. The stock was up 9.9% at 11:50 a.m. EDT.

So what

Vodafone reported first-quarter revenue of 10.7 billion euros, down from 10.9 billion euros in the prior-year period. The decline was mostly due to a negative impact of 0.2 billion euros from currency exchange rate changes. Organic service revenue was down 0.2%.

A rising stock chart.

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Vodafone also reiterated its full-year guidance, which calls for adjusted earnings before interest, taxes, depreciation, and amortization between 13.8 billion euros and 14.2 billion euros and pre-spectrum free cash flow of at least 5.4 billion euros.

Vodafone also announced that it had finalized a network sharing partnership with Telecom Italia. In addition, the company agreed to merge its Italian towers with INWIT. Vodafone will receive a cash consideration of 2.14 billion euros and a 37.5% stake in the combined entity.

In a separate announcement, Vodafone detailed plans to separate its European tower infrastructure into a new organization, which will be operational by May 2020. The plan may culminate in an IPO for the new entity, although other alternatives are also being considered.

Now what

Vodafone plans to use any proceeds from its European tower separation to reduce its debt load. The company is aiming to monetize a substantial portion of the new entity over the next 18 months, depending on market conditions.

"Given the scale and quality of our infrastructure, we believe there is a substantial opportunity to unlock value for shareholders while capturing the significant industrial benefits of network sharing for the digital society. We are focused on executing this strategic priority over the next 18 months," said Vodafone CEO Nick Read in prepared remarks.