We don't generally cover what happens in Europe, but if you read a lot of business news, you've probably heard that Vodafone, the world's largest mobile operator by revenue, recorded the largest net
loss in European corporate history: $41 billion. That is such an astronomical amount of money for one company that it's hard to wrap your head around how anyone could post such a massive loss and
still be around to talk about it next quarter. However,
Business Week tells us that the wireless giant is in no danger of going bust. As it turns out, a one-time write-down of its
assets--mostly in Germany--is responsible for the unprecedented losses. Otherwise, results were actually decent: nearly $18 billion in operating revenues. In fact, Arun Sarin, the company's chief
executive, was not bothered by the results, claiming that Vodafone is "outperforming its competitors." But others don't agree: one wireless consultant said "Vodafone's entire global strategy is
falling apart," adding that a massive sell-off is imminent. One of the main problems is that 80 percent of the company's revenues come from the plummeting business of old-fashioned voice calling.
Meanwhile, revenues from data services have yet to take off following the billions the company invested in 3G mobile networks. Vodafone lost 13 percent of its market share last year, and investors are
starting to think that trend can only continue. Investors are now calling for Vodafone to sell its 45 percent stake in New York-based Verizon Communications.
Read the whole story at Business Week »
