Vodafone considering exit from Verizon

Vodafone CEO Vittorio Colao has re-ignited market speculation that the carrier is seeking to divest its 45% stake in Verizon Wireless.

Speaking at Goldman Sachs media conference in New York, Colao confirmed that the Vodafone board is “re-looking” at  its €33.9 million share of the biggest US cellco. “Verizon Wireless is and has been a good investment. We are a minor investor, but very active. The board continues to re-look at the situation.”

In 2005 Vodafone received a dividend of  €1.22 billion for its stake in the US carrier but since then  has enjoyed zero ROI as Verizon has focused on repaying debt. Verizon’s €1.42  billion acquisition of Alltel last year has reduced the likely hood of any shareholder return until at least 2011.

Verizon Communications, which owns 55%, has publicly indicated that it was open to acquiring Vodafone's holding.

Colao said that the Vodafone board regularly examines at other options , but “for the time being we are here.”

In November last year Colao planted the seeds of divestment talk, declaring that that the company was “open-minded” about its position in Verizon Wireless.

Vodafone is in the midst of a €678 million cost cutting drive and will axe 500 UK-based jobs in the next couple of months.

 

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