Don't let the dismal performance of Vodafone's
Indeed, lousy performance at the Japanese subsidiary J-Phone is taking its toll. Heavy marketing spending has failed to halt a slide in average revenue per subscriber and customer sign-ups. Slow to get handsets to market for sexy 3G services, J-Phone is falling further behind market leader NTT DoCoMo
But don't let that put you off. While Vodafone must settle for the third slot in Japan, it ranks No. 1 or 2 in all the other markets in its global portfolio. Vodafone leads the pack in European 3G broadband network technology and services, with rollouts in Germany, Italy, Portugal, and Spain. The Vodafone live! multimedia service has attracted nearly 7 million users in just over a year. As Europeans go text messaging-crazy during Euro 2004 and the Athens Olympics this summer, Vodafone will get an added boost.
Fools take note: Vodafone's greatest strength is its cash-generating ability. Last year's profits and some asset sales allowed it to reduce its net debt and make a number of acquisitions. Expect about $12.5 billion of free cash flow in 2005.
Vodafone's loss to Cingular Wireless in the bidding war for AT&T Wireless
Besides, in the United States, Vodafone owns 45% of Verizon's
Sporting an enterprise value of just 11 times 2005 free cash flow, Vodafone is hard to ignore. Even AT&T
Fool contributor Ben McClure does not own shares of any of the companies mentioned.