Issue #2003 - 02
Vodafone May Sell Stake In Verizon Wireless
LONDON (Reuters) - Mobile phone giant Vodafone Group Plc denied on Sunday a newspaper report that it was set to consider whether to sell its stake in Verizon Wireless to its partner, Verizon Communications.
The Independent on Sunday newspaper cited Vodafone chairman Ian MacLaurin as saying that the firm's board would make a decision on whether to exercise its option and sell its minority stake in the joint venture at a meeting early in the new year.
A spokesman for Vodafone told Reuters the company had no current intention of selling the stake.
"We are very, very clear, as far as Verizon's concerned, we are very happy with our investment," a spokesman for the firm told Reuters.
"We've always made it clear that we have no present intention of exercising our put option -- that is the way the situation stands."
Vodafone is rumoured to be considering its options in the US market, where it holds a 45 percent stake in CDMA operator Verizon Wireless. Vodafone has a put option to sell half its stake in the venture back to Verizon in July 2003 or July 2004 and the remainder in either July 2005 or July 2006. However, the company has stated that it has 'no intention' of excercising the option in July 2003. Such a move would be subject to an independent valuation of the business and could raise about USD 10b for Vodafone in the initial sale.
There has been speculation that Vodafone might use the money raised by excercising the put option to fund a bid for a GSM operator such as T-Mobile USA or AT&T Wireless.
Verizon's decision to opt for the CDMA2000 evolution path, against Vodafone's choice of GSM, has caused analysts to question the rationale of Vodafone continuing its involvement in the venture. Vodafone has made significant investments in building its brand abroad and marketing its global roaming capabilities. A GSM-based network in the US would give Vodafone unrivalled coverage
MobileInfo Comments and Advisory: This
may stay as a rumour but there is always smoke, if not fire in
this rumours. To most analysts, it makes sense for Vodafone to have
a compatible carrier across the ocean. On the other hand, CDMA is
having greater success in North America and bottom line may be all
right to hang on to Verizon.
Note: This news release may contain
forward-looking statements within the meaning of section 27A of the
Securities Act of 1933 and section 21E of Securities Exchange act of
1934 in USA. Similar provisions exist in other countries. There is no
assurance that the stipulated plans of vendors will be implemented.
MobileInfo does not warrant the authenticity of the information.
Readers should take appropriate caution in developing plans utilizing
these products, services and technology architectures. All
trademarks used in this summary are the property of their respective