Light Reading

Beal's New Gig: Integrating Vodafone & Tata?

Sarah Thomas
2/3/2014
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There may be an even bigger strategic job waiting for Matt Beal when he joins Vodafone's CTO group if, as reports suggest, the UK-based operator is to acquire all of Tata Group's telecom assets.

According to several recent reports, Vodafone Group plc (NYSE: VOD) is looking to acquire all of India-based Tata Group's telecom assets, including Tata Communications Ltd. , its global fiber/subsea network and international Ethernet services provider, and Tata's mobile assets in India where Vodafone is already a major mobile services player.

The companies aren't commenting, but rumors of a Vodafone/Tata tie-up have been swirling for awhile now. They just happen to make more sense now that Vodafone has hired on CenturyLink Inc. (NYSE: CTL) CTO Matt Beal as its new Group Technology Architecture Director, slated to begin on April 1st. (See Vodafone Steals CenturyLink's CTO and Vodafone to Revamp Top Tech Team.)

Upon confirmation of the appointment, which Light Reading broke last week, Heavy Reading analyst Caroline Chappell noted that Beal's background in network transformations and experience in integrating acquisitions could be useful if the Vodafone Tata acquisition rumors prove true.

She wrote on the Light Reading message boards: "Given Beal's background, might he be coming onboard to integrate the C&W/Tata Comms networks - should the Vodafone acquisition of Tata pan out?"

It is looking increasingly likely that the acquisition will pan out, too. Vodafone's biggest goal this year is to bolster its fixed and mobile broadband networks, as well as improve its enterprise support and customer experience management systems. It also has the cash on hand for a buying spree given its soon-to-close divestiture of Verizon Wireless . And, as Light Reading India points out, the deal would greatly strengthen Vodafone's presence in India, where the government has recently loosened its M&A rules, making it the largest wireless operator in the country. (See Vodafone to Revamp Top Tech Team and TTSL, Tata Comm Buyouts Can Give Vodafone Big Data Leap.)

Tata, whose holdings also include automative and steel, could use an exit from its telecom business, which has been losing money for the parent company.

If a deal is in the works, it seems likely Beal was a factor in Vodafone's plan. He knows his way around an acquisition and is no stranger to Carrier Ethernet and integrating fixed and mobile networks either. A Vodafone tie up would have its fair share of challenges, including the fact that the Indian government owns 26% of Tata currently, but Beal might just be the man to help bring a Vodafone/Tata telecom combination together.

— Sarah Reedy, Senior Editor, Light Reading

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C Chappell
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C Chappell,
User Rank: Blogger
2/4/2014 | 8:49:59 AM
Re: Thoughts?
As Nabil Souza, CEO of start-up OSS player, Ubiqube, points out, 'Today, telco enterprise businesses deliver margin, consumer businesses deliver market cap'. Telco B2B divisions are their powerhouses and potential cash cows going forward, as retail divisions reel under attacks from OTT players, market saturation and other competitive pressures. But B2B businesses are increasingly a scale game, particularly where cloud is concerned. Vodafone bought C&W which is sub-scale compared to the global giants - AT&T, Verizon, Orange Business Services, even BT Global Services. Tata, despite its huge network footprint and traffic volumes is also subscale in the enterprise space - but put together with C&W and Vodafone's access to enterprise customers and you begin to have a challenger - and one that is well placed to grow enterprise mobility services. 
Ray@LR
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Ray@LR,
User Rank: Blogger
2/4/2014 | 3:33:35 AM
Re: Thoughts?
Makes sense to me. 

Vodafone India is already a significant player but there are still many mobile operators in India (12) and there has been pressure for consolidation for some time -- but the thing about India is that you can never tell what the regulators are going to decide or rule on any particular case - it's a real lottery.

 

The global network/Ethernet assets make sense for Vodafone as that infrastructure would create a natural extension to the C&W assets it acquired in Europe. Not only would that network provide VOD with its own network for global data traffic transport but enhance its wholesale and enterprise services portfolio.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
2/3/2014 | 6:54:49 PM
Re: Thoughts?
It does seem like Vodafone is in good shape to expand into India. But would there be regulatory concerns?
SarahReedy
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SarahReedy,
User Rank: Blogger
2/3/2014 | 2:44:26 PM
Thoughts?
What do you think, does Vodafone acquring ALL of Tata's telecom holdings make more sense than just the telepresence division? Is Beal the man for the job?
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