Vodafone’s policy of selling off minority stakes shows how its negotiating priorities have changed. It used to be the case that mobile operators were simply interested in growing user numbers, so it made sense to be in as many territories as possible, even those where only minority stakes could be obtained.

Now attention has switched to revenues per user (ARPU) and retention of paying customers. These attributes are easier to influence when you have control over the company.

Vodafone’s challenge in implementing its new policy may just be that it has made such a public statement about what it intends to do, that its co-shareholders are going to see it coming and hang tough in negotiations. So, it is going to have to work hard to secure good prices for its minority stakes. One thing Vodafone may have to do is to make sure it is always has a “BATNA” (a best alternative to a negotiated agreement) – including hanging on to its stakes. That way it will not look desperate to strike a deal and can hold out for a better price.

Response to original article here (guardian.co.uk)