Vodafone CEO Colao leaves door open to exiting Verizon Wireless
Vodafone CEO Vittorio Colao said he was pleased with Vodafone's minority role in Verizon Wireless (NYSE:VZ) and the financial returns Vodafone gets from the carrier, but said he was open to exiting the joint venture with Verizon Communications in the future.
Speaking Wednesday in Barcelona at the Morgan Stanley Technology, Media & Telecom Conference, Colao said that the dividend payments Verizon Wireless has started giving back to Vodafone are "an extra layer of comfort." Verizon Wireless will pay an $8.5 billion dividend to its parent companies later this year. Verizon Communications owns 55 percent of Verizon Wireless and Vodafone owns 45 percent of the venture.
A perennial question, however, is whether Verizon will buy Vodafone's stake in Verizon Wireless. Colao left the door open to that in the future.
"Verizon Wireless is in the biggest, most attractive market in the world, and it's the leading company in terms of management and it is still going very well," Colao said, according to Reuters. "Having said that...the board formally twice a year, and perhaps even more, looks at the portfolio. We look at the pros and cons and we look at the situation and the board makes that decision."
Vodafone, a global operator, has in the past few years been disposing of assets its does not wholly control, moves that have heated speculation about the carrier dropping its stake in Verizon Wireless.
For its part, Verizon has always been open to the idea of buying Vodafone's minority share, but has said the price needs to be right. Verizon Communications CFO Fran Shammo reiterated that stance last week at an investor conference. He said that Vodafone is a "great partner" that has never stood in the way of expanding Verizon Wireless, and that Vodafone recognizes the value of the asset.
"But look, at the end of the day I continue to say if there is a willing seller, we are a willing buyer, but I am not going to overpay. So it is what it is," he said, according to a transcript of his remarks. "And they are content to be a partner and we are content to have them a partner. And we continue to run the venture and we do it the way we want, and we generate a lot of value."
- see this Bloomberg article
- see this Reuters article
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