Vodafone Calls Global Media Agency Review

Vodafone, the giant UK-based telecommunications giant, has called a global media agency review, the company has confirmed.

The company -- which provides mobile phone service in Europe and parts of Africa and Asia, and which is in the process of selling its 50% stake in Verizon Wireless back to Verizon -- spends an estimated $1 billion on ads annually.

Omnicom’s OMD handles the majority of the business, although the client has other shops on its media agency roster as well. A company rep said that OMD will be invited to participate in the review, and the agency is expected to participate, per sources.

“Vodafone has decided to review its existing media planning and buying agency arrangements,” the company said in a statement. “The move comes five years after the last global review in keeping with good corporate practice, and following the advancements in the media and digital landscape. We expect to complete a thorough review process during the first half of this year. All incumbent media agencies will continue to provide services until further notice.”

The review comes at an interesting time for all of the agencies that participate in the pitch. The telecom giant is competing in a consolidating market in Europe and is considered an acquisition candidate by some industry followers. If the company is acquired -- which could happen within the next year -- that would raise questions about the winning agency’s relationship with the client.

Just today, AT&T -- which had been considering a bid for Vodafone -- said it would not do so for at least six months. According to reports AT&T had pondered an offer of approximately $115 billion for Vodafone.

The company was asked by UK regulators to clarify its position on Vodafone after AT&T executives met with European regulatory officials to discuss what hurdles it might confront if it were to pursue a bid.

In its statement today AT&T said, “at the request of the UK Takeover Panel, AT&T confirms that it does not intend to make an offer for Vodafone.” Under UK law that means that AT&T is now prohibited from launching a takeover bid unless another company makes a bid first, or if Vodafone invites an offer.

And some analysts believe AT&T’s interest in Vodafone hasn’t faded and that another six months gives it more time to prepare. “Our view remains that AT&T remains interested in European mobile assets and is likely to target Vodafone later in the year,” Nomura Securities analyst James Britton told Bloomberg.

OMD was appointed Vodafone’s global media agency in 2009 after a consolidation review, although it had handled a significant portion of the business before that.

 

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