Vodafone Group's revenue may be declining in its core European markets but the company does not need to sell its 45 per cent stake in U.S. operator Verizon Wireless in order to invest more in Europe, according to CEO Vittorio Colao. The Vodafone chief told Reuters that the company has a healthy balance sheet and can make acquisitions if necessary.
"The two things are not totally linked," Colao said. "If it is right to make some investments, we will make some investments."
Vodafone, which reported its third quarter earnings earlier this month, saw its revenues fall 2.6 percent. The company's revenue was down on an organic basis in Germany by 0.2 per cent, the UK was down by 5.2 per cent, Italy down by 13.8 per cent and Spain was down 11.3 percent. The company also warned there were no indications of any upswing in recession-hit European markets.
Because of its declining revenues, there has been speculation that Vodafone might cut its 45 percent stake in Verizon to fund the purchase of fixed-line assets to increase its product range. However, Colao downplayed that option.
In related news, Vodafone reportedly is close to inking a potential €10 billion Euro bid for German cable operator Kabel Deutschland. The company has hired Goldman Sachs to provide guidance on the deal, according to Reuters, which cited an unnamed source close to the matter. Despite rumours, Kabel Deutschland and Vodafone have refused to comment on speculation that a bid by Vodafone is imminent.
- see this Reuters article
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