The Anglo File: Vodafone Pays $2.5 Billion for Swiss Role

LONDON -- The 25% stake that Vodafone (VOD Quote) bought in Swisscom's mobile subsidiary for $2.5 billion doesn't sound like much to get excited about, but it does say a lot about how much better Vodafone's position is compared with that of its rivals.

Vodafone continues its spending spree to expand its global footprint as telecommunication companies of all kinds -- mobile operators, former monopolies and alternative network carriers -- are staggering under debt that's pushed down their credit ratings and share prices. In fact, Wednesday's announcement takes Vodafone's spending to $5 billion in little more than a month after it paid $2.5 billion for 2% of China Mobile.

"The strong balance sheet is what sets it apart from the other mobile operators," says Tressan MacCarthy, an analyst at SG Securities, which has no investment banking relationship with Vodafone and rates the shares a strong buy.

"While so many of its competitors are trying to raise money on the debt and equity markets or float their mobile assets, Vodafone can go out and buy what it fancies and is well ahead of the curve in putting together the pieces of this jigsaw," MacCarthy adds.

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