Vodafone is in talks to take control of Vizzavi, the multi-access portal, from Vivendi, its partner in the joint venture.

Vizzavi was formed in May 2000 as a cross-platform portal for web, interactive television and mobile users. It was to provide Vivendi with a global platform for distributing content and services, while Vodafone would gain a content-rich service to encourage usage of its mobile networks. The formation of the joint venture was a key factor in Vodafone’s hostile takeover of Mannesman, luring Vivendi away from a possible ‘white knight’ rescue of the German telecoms group. However, despite a joint investment of around EUR 1b, Vizzavi has not been a success for Vivendi and is now seen as a non-core asset as the company prepares a massive disposals programme to reduce its debt-mountain. A joint statement said the companies were in talks, including submissions to the relevant competition authorities. It is thought that Vodafone would restructure Vizzavi to focus entirely on its mobile capabilities.

The statement read: “Vodafone Group Plc and Vivendi Universal confirm that they are in discussions concerning the future shareholding structure of their joint venture company, Vizzavi. These discussions may lead to an offer by Vodafone to acquire all or a part of Vivendi’s shareholding in Vizzavi. However, as a result of these discussions, certain filings are being made with competition authorities in various territories. This does not indicate the conclusion of any discussions currently taking place, and no further comment will be made by either party unless and until such a conclusion is reached.”

Insight

Vodafone is the only likely buyer of Vivendi’s stake in Vizzavi and the operator has little choice but to continue funding the venture or risk the total disarray of its mobile internet strategy. If the purchase is made, and it appears there may be regulatory hurdles to overcome before it can be approved, Vodafone will face two immediate concerns. Firstly, it must rapidly cut costs by refocusing Vizzavi for the mobile environment and dispense with any visions of a global platform for web and interactive television. Most importantly, it must also start sourcing compelling content and opening up Vizzavi to third party application providers.

Vodafone is uniquely placed to deliver an integrated mobile portal on a global basis and must use its scale to attract premium content providers to Vizzavi. This will require the implementation of a proper revenue sharing system to ensure content providers can make money from their services and a global m-payment initiative to ensure consumers can pay for them simply and easily, without recourse to cumbersome credit card methods. The challenge will be to balance the benefits of scale with the proven requirement for truly localised content for each region.