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Vodafone (VOD), Meta Team Up to Enhance Network Efficiency

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Vodafone Group Public Limited Company (VOD - Free Report) recently announced that it has joined forces with Meta Platforms (META - Free Report) to optimize the delivery of short-form videos and ensure efficient utilization of existing network infrastructure. Platforms like Instagram, TikTok and YouTube are witnessing a rapid increase in video consumption, leading to significant growth in data usage on mobile networks. Per Ericsson's 2024 Mobility Report, global data traffic rose 25% in the 12 months leading up to the first quarter of 2024, with video making up 73% of all mobile traffic by the end of 2023.

This relentless growth in data usage puts considerable strain on network infrastructure. Telecom operators have to bear hefty costs to upgrade networks and accommodate the surging data traffic. Telecom companies argue that as one of the biggest beneficiaries of the network upgrade, the big tech companies should contribute to the expenses. Aligned with this concept, prominent telecom operators, including Orange, Telecom Italia and Telefonica earlier proposed that Google, Netflix, Meta and Amazon should shoulder a portion of 5G rollout costs.

To address these challenges, Meta has made improvements to its video engineering and infrastructure deployment systems for more efficient video delivery. Vodafone has successfully freed up network capacity at key 4G and 5G sites in high-traffic areas like shopping centers and transport hubs. Implementing these optimizations across Vodafone's has boosted network efficiency in its European without compromising the viewing experience.

5G subscription currently stands at 15% of total subscriptions in Europe, and the figure is projected to climb to 53% by 2028. This significant 5G growth presents both opportunities and challenges for telecom operators. Vodafone’s partnership with Meta is likely to pave the way for other operators to adopt proactive measures in managing network congestion and enhancing service quality.

The stock has lost 0.3% over the past year compared with the industry’s decline of 9.9%.

Zacks Investment Research
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Zacks Rank & Stocks to Consider

Vodafone currently carries a Zacks Rank #3 (Hold).

NVIDIA Corporation (NVDA - Free Report) , sporting a Zacks Rank #1 (Strong Buy) at present, delivered a trailing four-quarter earnings surprise of 18.43%, on average. In the last reported quarter, it delivered an earnings surprise of 11.48%. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.

Motorola Solutions Inc. (MSI - Free Report) provides services and solutions to government segments and public safety programs, along with large enterprises and wireless infrastructure services. Currently, Motorola carries a Zacks Rank #2 (Buy) at present.

It delivered a trailing four-quarter average earnings surprise of 7.54% and has a long-term growth expectation of 9.47%. In the last reported quarter, Motorola delivered an earnings surprise of 11.51%.

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