Speculation that Verizon and Vodafone were in merger talks have been scuppered following remarks from Ivan Seidenberg, Verizon Communications' CEO, stating there were no reasons to pursue the idea.
Vodafone's share price, having improved nearly 3.5 per cent last week, slid by 1.4 per cent on the news.
While Seidenberg confirmed that the two companies would continue to evaluate options for the Verizon Wireless partnership, but, without any new information, "a merger doesn't seem to have a lot of appeal."
Perhaps providing some insight into this comment, the CEO added that the idea of a global wireless-only operator was no longer the preferred model due to the problems associated with reaching economies of scale.
Vodafone's all-wireless business model would eventually be a disadvantage as telecommunications companies move toward joining fixed and mobile businesses, said Mr Seidenberg, who added that it also would be difficult to make the case to investors that the two companies could grow faster together. "There's no compelling reason for investors to think this is an exciting thing to do," said Seidenberg.
Whether this approach to resolving the long-standing issue of Verizon Wireless' future might be considered by some as a negotiation tactic, Vodafone has become increasingly keen to push forward and adopt a more aggressive approach.
Oddly, Seidenberg also used the occasion to announce that Verizon Wireless provided that best cellular service in the US, and was also better than anything available in Europe or Asia. No data was provided to substantiate the claim.
For more on this story:
Financial Times
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