UK’s Vodafone Group PLC (LSX:VOD) (NASDAQ:VOD) has agreed on a deal with the Kuwaiti based Zain, which will allow Vodafone’s travelling customers to use the platform while in Bahrain, Saudi Arabia, Jordan, Kuwait, and Iran.
This addition takes Vodafone’s partner markets to more than 50 across the globe; the partnership will allow the company cut on infrastructure costs required to set up its own facility, and hence, improve on profitability.
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The new deal will also allow customers visiting the region to spend less on roaming services; whereas, Zain will use Vodafone’s brand and services in its home markets. Additionally, both partners are expected to extend and improve their international presence by widening their joint multinational customers coverage.
Zain’s deputy chief executive, Hisham Akbar, is quoted in a statement by the Financial Times saying, “Vodafone’s commercial insights and technical expertise will translate into significant operational efficiencies for Zain over the long term, as we transition our networks to next-generation networks and beyond”.
On the other hand, Vodafone said that the deal will bolster its “ability to meet growing demand among multinational businesses for voice and data communications services, and would complement its regional operations in Egypt and Qatar,” the report notes.
Additionally, Vodafone Partner Markets Chief Executive, Ravinder Takkar, said that combining the Geographical reach of the two companies networks will strengthen and deepen the benefit of the customers operating in large dynamic markets.
The two companies have been on the front foot in trying to minimize expansion costs through local partnerships, and this topic has elicited some criticisms in the recent past.
A good example is Vodafone’s Group PLC (LSX:VOD) (NASDAQ:VOD) partnership with Telefonica S.A (NYSE:TEF) (MCE:TEF) earlier last month, which was a subject of scrutiny by the regulators. Indeed, telecommunications companies have been accused of forming these kinds of partnerships, which eliminate service differentiation, a key factor to quality services. Additionally, the partnerships are scrutinized to make sure that they don’t essentially represent a merger.
Vodafone Group PLC (LSX:VOD) (NASDAQ:VOD) which realized a slowdown in revenues, due to declined revenues in Southern Europe and the U.K, after recording improved sales in India and Turkey could be seeking more revenue streams from the Middle East, albeit at minimal costs.
In July, Vodafone also acquired U.K’s Telecom group Cable & Wireless World Wide for £1 billion, further adding to its global muscle in telecommunications industry. Vodafone would be running C &WW independently as a separate partner, until it completes its integration of C&WW network and technology assets into Vodafone network.
Additionally, the company has also diversified its business, by partnering with IBM in a deal that will see the telecoms company use cloud computing and mobile devices in providing Mobile Smart Home appliances services.
The report on Wall Street Chest Sheet notes, “at the IFA consumer electronics event in Berlin, Vodafone Group PLC (LSX:VOD) (NASDAQ:VOD) and International Business Machines Corp. (NYSE:IBM) are to demonstrate the mobile management of a washing machine, along other smart home devices connected by Vodafone’s Global M2M Platform,which runs on IBM’s new SmartCloud Service Delivery Platform.”
Vodafone also holds a stake in U.S-based telecommunications company, Verizon Wireless.
At the time of this writing, Vodafone Group PLC (LSX:VOD) (NASDAQ:VOD) stock was trading at $28.90 per share, $0.13 down, or 0.45% decline from the previous close. At the London Stock Exchange, the stock closed £182.75 per share, up £1.25, or 0.69%, from previous close. As of today, Markets are closed for Labor Day in the U.S.